Ryman Hospitality Properties, Inc. Stock

Welcome to Ryman Hospitality Properties Third Quarter 2026 Earnings Conference Call. Hosting the call today from Ryman Hospitality Properties are Mr. Colin Reed, Executive Chairman; Mr. Mark Fioravanti, President and Chief Executive Officer; Ms. Jennifer Hutcheson, Chief Financial Officer; Mr. Patrick Chaffin, Chief Operating Officer; and Mr. Patrick Moore, Chief Executive Officer, Opry Entertainment Group.

This call will be available for digital replay on the company's Investor Relations website. [Operator Instructions] It is now my pleasure to turn the floor over to Ms. Jennifer Hutcheson.

Ma'am, you may begin.

Good morning. Thank you for joining us today. This call may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements about the company's expected financial performance.

Any statements we make today that are not statements of historical fact may be deemed to be forward-looking statements. Words such as believes or expects are intended to identify these statements, which may be affected by many factors, including those listed in the company's SEC filings and in today's release. The company's actual results may differ materially from the results we discuss or project today. We will not update any forward-looking statements, whether as a result of new information, future events or any other reason.

We will also discuss non-GAAP financial measures today. We reconcile each non-GAAP measure to the most comparable GAAP measure in exhibits to today's release.

I'll now turn the call over to Colin.

Thank you, Jen, and good morning, everyone. We are pleased to have delivered another standout performance this quarter, including record third quarter consolidated revenue and adjusted EBITDAre. In our Hospitality business, demand for high-quality group meetings experiences remains healthy. And the investments we have made to enhance our assets, strengthen our competitive advantages and support our premium group customer strategy are paying off.

In the third quarter, we continue to see premium groups generate incremental revenue once on property, through stronger meeting attendance, additional functions and enhanced food and beverage offerings. Our all-under-one-roof model is uniquely positioned to capture the incremental revenue opportunities these premium customers generate once on property.

We also continue to build on this momentum through investments that expand our platform and strengthen our group customer strategy, including the acquisition of Grande Lakes Orlando. We announced, funded and closed the transaction during the third quarter. Grande Lakes adds a premium group-orientated resort in the top meetings market in the country and completes a nationwide rotational pattern for JW Marriott customers across Grande Lakes, Hill Country and Desert Ridge.

Our integration efforts are off to a strong start. Over time, we see multiple opportunities to create value, including expanding our group customer rotation strategy, capturing synergies at the portfolio, market and property levels and gaining new insights from the Ritz-Carlton customer base. We look forward to updating you on our progress over the next 12 to 18 months.

Our OEG business also continues to perform well. Historically, the third quarter is a lighter contributor to full year profitability due to typical cadence of our show calendars and seasonal weather patterns across the markets. But we are pleased with the underlying performance of the business. Our artist-centered venues continue to deliver strong top and bottom line growth, led by our Nashville locations and our venue operators continue to drive growth in guest per cap.

In October, we opened our second Category 10 location in Las Vegas. The venue opened to a line around the block and both opening weekend foot traffic and guest spending exceeded our expectations. We continue to believe both Category 10 and Ole Red have additional runway for new unit growth, and we look forward to opening new units in Orlando and Indianapolis in early 2028. Taken together, our results this quarter reinforce the strength of the business that we have built and the strategies supporting their growth.

Our premium group strategy supported by the investments we're making in our hospitality platform is paying off, while our entertainment investments are creating new opportunities around powerful brands in growing markets. I must say that I am very proud of our leadership team and the way our businesses continue to flourish in a somewhat crazy world we live in. We posted solid RevPAR and total RevPAR growth this year compared to last. And this third quarter same-store growth is really good.

Speaking candidly, as a fairly significant shareholder of Ryman, it won't surprise you to know that I pay particular attention to AFFO per diluted share growth quarter-over-quarter. As to me, this represents whether we are creating real value for our shareholders. And I think you know the answer to what has occurred so far this year. And yes, I'm a happy shareholder, but I do believe the best times are ahead of us. Why? Because we have developed real strategies for our business. We have the best-in-class management team that are operators at heart and really understand this business. And I think it's fair to say we're pretty good at allocating capital.

Now let me make 2 more comments before passing this meeting over to Mark. Last month, we announced a difficult decision to retire the General Jackson Showboat after more than 40 years of operation. Growing maintenance requirements as the vessel reaches the end of its service life has resulted in far more frequent operating disruptions, making it increasingly difficult to consistently deliver a first-class experience for our customers. The General Jackson has offered visitors to Nashville a distinct experience for many years, and we're grateful to the teams who have brought that experience to life.

And finally, as we initially disclosed back in June, our Board, advised by Morgan Stanley, continues to evaluate the opportunity to provide OEG with greater independence while creating value for our shareholders. The company has not yet entered into definitive agreements with respect to a potential investment by third party in OEG, and there can be no assurances that any definitive agreement will ultimately be reached.

Our focus remains on pursuing a path that we believe will preserve OEG's legacy while positioning the business for continued growth and enabling us to continue as a stakeholder in the business. We look forward to providing additional updates as and when we have more to share.

Now with that, let me hand the call over to Mark to discuss the quarter and our operating outlook for the rest of this year.

Thanks, Colin, and good morning, everyone. I'll provide more detail on our third quarter operating performance, forward booking trends and updated outlook for the remainder of the year. As Colin mentioned, our same-store hospitality portfolio delivered a terrific third quarter. Same-store RevPAR and total RevPAR increased 7.9% and 8%, respectively, over the prior year quarter, with each metric outperforming our expectations by approximately 400 basis points.

Same-store adjusted EBITDAre improved 12% over the prior year quarter and exceeded our expectations by approximately $7 million. The RevPAR beat was balanced between group and leisure, which together with group catering outperformance drove total RevPAR outperformance. The adjusted EBITDAre beat was primarily top line driven, supported by continued strong operating discipline.

Let me provide some additional details on each customer segment. In our group business, consistent with first half trends, the portfolio continued to benefit from strong in-the-month for-the-month upside, including higher ADR and catering contribution relative to our expectations. Throughout the year, groups have generally communicated an expectation to spend to their budgets. However, we continue to see select premium groups generate incremental revenue once on property through stronger meeting attendance, additional functions and enhancements to their food and beverage offerings.

This is an important benefit to our premium group strategy. We're attracting higher-rated customers with greater spending potential and our large-scale assets and operating model give us more opportunities to capture that upside during their stay.

Against this backdrop, group ADR in the third quarter increased 3.5% year-over-year, more than 200 basis points better than our expectations. Banquet and AV revenues increased 14% year-over-year, driven by nearly 10% growth in catering contribution per group room night, a proxy for spending per attendee. Relative to our expectations, corporate groups at Gaylord Palms, Gaylord National and Gaylord Rockies accounted for most of the upside.

In our leisure business, outperformance was driven by stronger-than-expected demand at Gaylord National and Gaylord Texan with growth at both properties outpacing the strong transient trends in their respective markets. Gaylord National benefited from 4th of July and America250 activity. At Gaylord Texan, leisure demand exceeded our expectations throughout the quarter and accelerated further in September, following the completion of its room renovation activity.

The combination of group and leisure strength produced record results across the portfolio. The same-store portfolio achieved its highest third quarter total revenue and adjusted EBITDAre on record. The third quarter total revenue record in Opryland, Texan, National and Rockies each achieved record third quarter adjusted EBITDAre.

Our forward group indicators also remain healthy. During the third quarter, we booked more than 653,000 same-store gross group room nights for all future periods at an ADR of $293, a third quarter production ADR record. Net group room nights booked for all future periods increased 9% year-over-year, reflecting continued healthy underlying demand net of normalized attrition and cancellation activity.

Importantly, group rooms revenue pace for 2027 and 2028 improved sequentially during the quarter. As of the end of September, same-store group rooms revenue on the books for 2027 was 4.5% higher than the same time last year for 2026, a 130 basis point improvement since the end of July.

For 2028, group rooms revenue on the books was 1% higher than the same time last year, a 150 basis point improvement since the end of July. ADR pace in both years, which we view as the most durable component of revenue pace, continues to trend in the mid-single-digit range. These results reinforce the strategic inventory decisions we made earlier this year to hold additional availability for premium group customers booking in 2027 and 2028.

The improvement in rooms revenue pace, together with healthy lead volumes, late-stage pipeline activity, favorable attrition and cancellation trends and a lack of new supply supports our view that the underlying group demand backdrop remains healthy and that we're well positioned to continue growing our premium group business.

I'll now turn to recent acquisitions, which are not included in the same-store portfolio. The JW Desert Ridge delivered third quarter results in line with our expectations. Growth was driven by group performance, which benefited from a favorable comparison due to last year's meeting space renovation. Group demand increased nearly 17% and banquet and AV revenues increased nearly 18%.

Our integration and property improvement initiatives, along with our efforts to realize synergies continues to progress as expected, including the introduction of ICE! programming for the first time later this month. Our most recent acquisition, Grande Lakes Orlando, contributed 1 month of results following the September 1 transaction closing date. Our integration efforts have just begun here, and we look forward to providing additional color as that work progresses.

Turning now to Entertainment. The business generated record third quarter revenue, an increase of 1.5% and adjusted EBITDAre of $23.8 million. As Colin mentioned, the third quarter is historically a lighter contributor to full year profitability. However, our core business continued to perform in line with our expectations. Against that lighter seasonal earnings base, maintenance-related operational disruptions for the General Jackson Showboat had a disproportionate impact on the quarter's profitability.

Finally, let me discuss our updated outlook. As we noted in the press release, we're raising the midpoint of our guidance ranges for same-store hospitality to reflect the third quarter beat and a modest increase in leisure demand expectations for the fourth quarter. The midpoints of our guidance ranges now assume low single-digit growth in the fourth quarter leisure demand, excluding the impact of renovation disruptions at JW Hill Country.

We continue to be cautiously optimistic about holiday leisure performance in the fourth quarter. ICE! ticket sales are pacing ahead of the same time last year in our glide path for 2026, with particularly strong enthusiasm for this year's new themes. Leisure room nights on the books for November and December are also pacing ahead of the same time last year.

While these indicators are encouraging, we're still relatively early in the season. ICE! ticket sales to date represent roughly 20% of the full season goal and historically, most sales occur within 7 days of visitation. For our Entertainment business, we're lowering the midpoint of our adjusted EBITDAre guidance range by $3 million. This reflects the lower year-to-date profitability related to General Jackson Showboat as well as costs to wind down its operations.

The net increase to our consolidated adjusted EBITDAre guidance range translates to higher AFFO and AFFO per share outlooks, including nearly 10% growth in AFFO per share at the midpoint. We believe this level of growth is particularly meaningful given our outlook includes only 4 months of operating contribution from Grande Lakes and the share dilution from our recent equity offering.

Before I turn it over to Jennifer, let me also offer some early perspective on some of the building blocks for 2027 with the important caveat that we're still working through the budget process with Marriott and expect to provide formal 2027 guidance when we report our fourth quarter results in February. We remain confident in our ability to meet or exceed our 2027 financial objectives for adjusted EBITDAre and AFFO per fully diluted share that we laid out at our 2024 Investor Day.

While the operating environment has evolved differently than we anticipated, our core business has performed largely as we would have expected and the underlying fundamentals remain strong. We've also made opportunistic capital allocation decisions along the way, including the acquisitions of the JW Desert Ridge and Grande Lakes Orlando and the deferral of the Rockies expansion and SoundWaves development.

As we look to 2027, several factors underpin our expectations. As I mentioned earlier, same-store group rooms revenue on the books for 2027 is pacing 4.5% ahead of the same time last year for 2026 with ADR up mid-single digits. Corporate group mix on the books is approximately 300 basis points higher than the same time last year, which we expect will continue to support healthy banquet and AV revenue spending.

Regarding our capital projects underway, several projects at the JW Hill Country are expected to be completed in March, including the guest rooms renovation, event lawn enhancements, and the first phase of our lobby renovation.

The meeting space at Gaylord Opryland is expected to open midyear. While our 2027 capital planning process remains underway, we currently expect disruption on the portfolio profitability to be lower in 2027 than in 2026. Taken together, the business we have on the books, the favorable group mix trends, contributions from new projects coming online and lower expected disruption positions us well for a strong 2027.

And with that, I'll turn it over to Jennifer to discuss our balance sheet and capital allocation.

Thanks, Mark. We ended the first quarter with $348 million of unrestricted cash on hand. In addition, we held $47 million of restricted cash available for FF&E and other maintenance projects. Both our corporate and OEG revolving credit facilities were undrawn, resulting in total available liquidity of nearly $1.3 billion.

During the quarter, we issued 5.865 million shares for gross proceeds of approximately $690 million and $700 million of senior unsecured notes, both to fund the acquisition of Grande Lakes Orlando. Both offerings attracted significant investor demand with order book multiple times oversubscribed. As a result, at the end of the quarter, our pro forma net leverage ratio based on total consolidated net debt to adjusted EBITDAre, assuming a full year contribution of adjusted EBITDAre from Grande Lakes Orlando was 4.4x.

We continue to believe our liquidity position and leverage profile provide meaningful flexibility to fund our capital plans, support our dividend requirements and execute our long-term strategy.

Regarding our outlook for capital expenditures in 2026, we are narrowing the range to $450 million to $500 million for the year, reflecting greater visibility into the timing of spend for the balance of the year. The overall scope of our multiyear capital plan remains unchanged, and the projects we have underway remain on time and on budget.

Regarding our dividend, it remains our intention to continue to distribute 100% of our REIT taxable income through dividends over time. And finally, as it relates to OEG, while our strategic discussions remain ongoing, Atairos' 4-year anniversary IPO request put right is currently un-exercisable.

And with that, Liz, we can open it up for questions.

[Operator Instructions] Our first question will come from Dan Politzer with JPMorgan.

I think it was helpful you laid out some building blocks and how to think about 2027. But it seems like most -- a lot of the projects that you've announced, they wrap up midyear in 2027. So I think that it would be helpful if you kind of put some parameters around how you think about returns across the Texan room renovation, Hill Country room renovation, the field house at Opryland and the meeting space, just so we can think about the ramp and growth for next year?

Patrick, do you want to start?

Mark, do you want to?

No, if you want to start.

Yes. So let's take each one of those one at a time. So as we think about Texan and Hill Country and the room renovations, Texan has completed in the July, August time frame. Hill Country will finish up in the first quarter. We expect a lot of that lift will materialize in ADR that we're booking. And so a lot of that is already materializing in the room nights that we have on the books for 2027. And when we give guidance for 2027, we'll give more color around that.

We have a number of food and beverage outlets that are stabilizing or opening at Gaylord Opryland, and that should help them produce some lift as well, and that will be included in our guidance as well. But 2027 is sort of a manifestation of some of the efforts we've taken to remix the business and leave more openings for corporate business to book in.

And as you've seen with our pace, that has definitely started to materialize, and we've seen month-over-month and quarter-over-quarter improvement in the bookings pace for '27 and '28.

Our next question comes from Smedes Rose with Citi.

I just wanted to ask you a little bit maybe just help educate me on this, just the way that the forward room rates work. It looked like -- so you did $293 you said during the quarter for all future bookings. And last year, for the same quarter, it was $291. But then in the second quarter, you had mentioned $310 for all forward bookings, and it was up around 9% year-over-year. And I'm just wondering if that -- is there sort of a seasonal slowdown when you book in the third quarter for future periods? Or maybe just help me understand the year-over-year changes and the sequential changes.

Smedes, this is Patrick Chaffin. Good to hear from you. Great question. Let me start by saying that bookings can be really lumpy from quarter-to-quarter, and I think that's what you're getting to, and that's completely normal. Specifically addressing what we saw in ADR in the third quarter of 2026, there is a perceived deceleration.

But the reality is we had a lower concentration of new definites in the third quarter for the front half patterns. And when I say front half patterns, that means groups that are arriving on a Monday or Tuesday pattern versus those who come in a back half pattern, which is a Wednesday or a Thursday arrival. Monday and Tuesday arrivals are typically your stronger rate patterns, and that's where a lot of corporate groups want to get into.

But your back half patterns historically have been a little bit tougher to fill, and that's something that strategically we've asked our sales team to really focus on as we move through this year and going into the future. So our bookings in the third quarter were actually down about 15% for this -- the premium-priced arrival window of the front half pattern even though the leads were actually up about 24%.

So the groups that actually booked and where the focus for us this quarter was on really filling some of those back half patterns, which are a little bit tougher to fill. So that's not a bad thing that we saw more of those back half patterns get filled up. Again, the sales team has really been focused on -- we've been challenging them to get better at filling some of those back half patterns.

So ADR is not always a great indicator of exactly what's going on with the business. And in this case, in the third quarter, while the $293 would indicate potentially a deceleration, it's actually a really strong indication of the health of our business as the sales team is filling some of those tougher to fill patterns and having great success with it. And when you get those back half patterns filled more efficiently, that sets up for compression on rate for those front half patterns.

So overall, ADR is definitely not decelerating, and we are extremely pleased with the progress that the sales team made on filling some of those tougher patterns in the third quarter.

The year of the booking also can distort that.

Absolutely. And so to your point, there was growth in 8 of the 9 arrival years. But again, it was over some of those tougher patterns to fill.

Our next question comes from Aryeh Klein with BMO Capital Markets.

Colin, you mentioned in your remarks potential learnings from the Ritz-Carlton at Grande Lakes. And I'm wondering if you can expand on that a little bit and what you're trying to really learn and some of the future opportunities around that. And then just not related, but General Jackson, what's the annualized impact from that? And are you planning a replacement?

Yes. So in terms of Ritz-Carlton, it's for all of us, the first time we've dabbled with the Ritz-Carlton, and we -- as we look at things like margins, particularly in areas of rooms, we are getting our arms around why the margins are what they are. And EBITDA margins in the Ritz-Carlton businesses are materially lower than the Gaylord Hotels business.

And Patrick and his team have been spending a lot of time here over the last several months once we confected the acquisition, really truly trying to understand the opportunities in the Ritz-Carlton business. Patrick, do you want to expand on that?

Yes. I mean just to your point, we want to make sure that we honor a very well-respected luxury brand like Ritz. And obviously, the customers come in and staying and the Ritz have high expectations. Historically, to Colin's point, that has not necessarily allowed for a lot of pressure on margins. But as we continue to honor that brand and understand it better, we do want to find opportunities to drive more efficiencies into the business because we do believe they exist, especially on the food and beverage and housekeeping side. So we are going to fully indoctrinate ourselves into understanding the brand, understanding how those customers think, maybe do some additional research. But then ultimately, what we'll be doing is looking for opportunities to drive more efficiencies in how the business is operated while still honoring those customers and that brand.

I just wanted to add that it's not only from an efficiency standpoint, one of the opportunities that we have with Gaylord Hotels, now the JWs and now adding this Ritz-Carlton is to better service the portfolio of meetings that meeting planners have. Meeting planners don't manage one meeting, they manage -- they might manage 30 or 40 meetings over the course of the year, and they span their entire organization. And we're already seeing some success with booking some of their larger meetings in Gaylord Hotels and now picking up some of their higher-end executive meetings, Board meetings, et cetera, into the JW. So there's a market share opportunity here as we look at the JW as well as the Ritz-Carlton.

Yes. And just to add to that, there was a question in our minds of the 9 miles that separates the Gaylord Palms campus and the Grande Lakes Orlando campus and whether that would be something that meeting planners could overcome. And in conversations that we've been having with meeting planners, their indication to us is that is not insurmountable. That's not an issue for us. We can move folks back and forth.

So maybe I'll put some of my sales incentive folks or some of my VIP executive suite folks at the Ritz and use the JW for some overflow and then have my main campus functioning over at Gaylord Palms. And we're actually moving forward with some arrangements like that with some meeting planners. So the hypothesis is starting to be proven out by meeting planners actually booking in and seeing that opportunity for the 2 campuses to function almost essentially as overflow support for each other.

I just -- I want to make one last comment, Aryeh, and try and wrap up the comments that both Patrick and Mark have just shared with you. We're awfully inquisitive of this brand, awfully inquisitive of this asset that we purchased. But our underlying thesis of our business is that we pride ourselves on having the highest EBITDA per room in REIT land by far.

And so yes, we want to make sure that the customer rotational piece is optimized and all of the stuff that Patrick talked about, but our goal at the end of the day is to generate very high EBITDA per guest room for all of the assets under our stewardship.

And then just to close out the other part of your question, Aryeh, on the General Jackson. As you know, we don't provide business unit level economics for the entertainment platform given its materiality. But I can tell you that as we've said in our prepared remarks and in the release, even though the third quarter for entertainment is seasonally light, the operations of the General Jackson did impact that third quarter and did primarily influence our view on the full year outlook and reflected in our guidance, which was a decrease of $3 million for the year at the midpoint.

Our next question comes from Patrick Scholes with Truist.

Do you have any further thoughts or any ability at this point to quantify maybe as far as basis points of potential margin what Marriott's fee relief might mean for you folks?

Patrick, this is Patrick Chaffin. We have -- when Marriott first came out with some of the guidance around that, we had not yet had a chance to roll it through. And as we've been working with the Marriott teams, the biggest upside that we see is on the procurement side. And so we've made some changes in the short term. We've migrated from Pepsi to Coca-Cola that was seamless, everything went very, very well. And there are other opportunities, food buy and other type of opportunities that are out there.

We have been asked by the Marriott team to give it a full cycle, if you will, and allow some of the year-end rebates to cycle through before we give any full guidance on exactly what that means for us. And so we're waiting to see what they're able to deliver in terms of rebates at the end of the year on food and beverage and some of the other operating supplies so we can get a full picture of what it looks like through a full cycle.

And so I think we'll probably have more information on that in February, but we really just don't have a complete picture from them yet that we can share.

Let me just -- I want to add -- I want to complement Patrick and his team along with the Marriott operating teams. And when you look at the quarter, obviously, we had really nice revenue growth and strong margin improvement, 120 basis points. But as you peel the onion, they're doing a really nice job in terms of managing costs in our business. We saw wage margin improvement of about 40 basis points this last quarter despite having about a 3.3% increase in wage rates year-over-year. So the teams have continued to do a great job, as we are growing revenue, of flowing that revenue to the bottom line.

Our next question comes from Chris Woronka with Deutsche Bank.

I was hoping to actually kind of zoom out on the business and talk a little bit longer term, if we could. And the question is, how you view the opportunities for higher margins between your kind of core room segment and your -- all your other operations. I know that's not the way you look at it. I know you look at it on a total customer value, total RevPAR basis. But just thinking about some of the technologies that are out there and some of the operating efficiencies.

And I'm really, I guess, kind of more also thinking about the core legacy Ryman business as opposed to Gaylord business as opposed to the -- might give a different answer if we included the JWs and the Ritz. But just how you think about that longer term? Is there one side of the house that has more margin opportunity than the other maybe?

Yes. I think that the opportunity for us is to continue to enhance the value proposition that we're delivering to meeting planners, to attendees and to leisure guests in these assets. I mean we sit in a position today where there is no new meaningful supply as far as you can see with nothing under construction.

And so, as you think about the large group business, these consumers have very few alternatives in terms of where they conduct their business. And the way that we try to look at pricing at driving margins and profitability is through the delivery of value. And that's why if you look back over the last several years, you see what we've done from a capital perspective, both in terms of room product as well as in terms of meeting space and food and beverage.

It's really to continue to enhance the quality of that experience, the breadth of that experience and to be able to continue to capture a greater, greater share of their wallet, but have them leaving, understanding that they've gotten value for that cost. And so I think if we deliver that value, we can continue to grow the revenue top line, and we can continue to grow margin and profitability.

I think the other thing, Chris, is a couple of weeks ago, Mark, Patrick and I hosted Marriott's CEO here for half a day and the guy that runs the U.S. operations of Marriott. And I would say we spent at least half of that meeting talking about productivity, application of technology, how we can work with them and partner with them to improve the efficiency.

And the goal at the end of the day, of course, is to improve margin and improve profitability per guest room. And I feel like our relationship with Marriott today is as strong as it's ever been. Mark and Patrick helped me on that. I think it's as strong as it's ever been. And I think there's a desire and a willingness on behalf of that enterprise to work with us and allow us to partner with them to improve efficiency right across the board.

Yes. Let me just put a fine point on this to give you just a data point that backs up both what Mark and Colin have said. Gaylord Opryland is a great example. The CapEx investments we're putting in there is completely changing the perception of that property in the mind of the meeting planner. And I met with a number of meeting planners who have toured what has been done thus far from renovation, what's going on from an expansion perspective and the re-concepting and repositioning of a lot of the food and beverage outlets.

And folks that were really not open to Opryland are now saying, I want to get into Opryland and I'm excited about being there. So across our portfolio, some of these CapEx investments are really, to Mark's point, driving value in the mind of the meeting planner so that as we've been talking about for many, many months now, we're not just raising rates, but we're giving enhanced value for the increased pricing.

To give you a data point to think about that, a lot of this is not just going to corporate groups, but trading up and pushing up the groups that are already coming in the rate that they're paying. And as a supporting data point, in the third quarter, the SMERF groups, again, the Social, Military, Education, Religious and Fraternal groups, which historically are kind of looked at as the filler groups that are not quite as valuable. Those SMERF groups moved up 26% in ADR that was booked in the third quarter.

So the sales team is doing an outstanding job of saying, here's the value we're delivering to you. And in order to get access to that, it requires a higher ADR to come on property. And those groups are saying, "We see that value and we're willing to pay for it." And as a result, we achieved an ADR for those SMERF groups of $316 in the third quarter, which is truly exceptional given where we've come in the past.

Our next question comes from Shaun Kelley with Bank of America.

For whoever wants to take it, just was looking a little bit more closely at specifically what's going on, on the margin line. And I'm just looking at kind of flow-throughs year-over-year, and I appreciate there are probably a variety of factors impacting the business. But just wanted some thoughts on how to think about flow-throughs as we start to attain these levels of RevPAR growth because I think we haven't seen high single digits in quite a long time. So maybe puts and takes for this quarter and then how to think about it as we bridge into the fourth quarter and for the balance of 2027.

Sure. I would tell you that what has been most encouraging to us, Shaun, is what's been happening on the banquet side of the business for -- throughout this entire year. We've seen levels of growth and not just from volume improvements. Volume obviously is helping that. But for the most part, this is meeting planners arriving on site and saying, "I want to add more breaks. I want to add more F&B offerings. I want to upgrade the quality of what I'm providing for my attendees."

And as you saw in the second and third quarter, it far surpassed our expectations, and we are excited as we look to 2027 and how groups are behaving, we believe that will continue. And so, from a flow-through perspective, that gives us tremendous encouragement. And then as I was just talking about a moment ago with Chris, as the value perception is improved and folks see what we're doing from a capital perspective, we continue to see ADR lift. And I know a lot of focus on third quarter and "Hey, was that slowing down?"

No, it's just that we're getting even better and better at filling some of the more challenging patterns because of the value that's being perceived by meeting planners in our hotels. So in the near-term, we expect to see transient rate and group rate continue to grow. Group occupancies continue to grow. And on the banquet side, we believe it's more of a new norm as far as how meeting planners are going to behave when they're on property, assuming that macroeconomic conditions do not worsen or become more uncertain. But they've kind of weathered the storm over the past couple of years and are getting more confident in spending one on property. And that flows through very, very well for us to the bottom line.

That's offsetting reductions in attrition and cancellation collections, which, again, is always a good thing to be happening in the business, and that continued in the third quarter. And so we're doing a great job with not only offsetting that high flow-through of collections decreasing, but driving more to the top through banquets and improved volume on group and transient.

Our next question comes from David Katz with Jefferies.

One of the things we've talked about and looked at a little further ourselves is trying to define a TAM for this JW Marriott strategy. And if we just search JW Marriotts with more than 500 rooms or 600 rooms, we get kind of a focused group of -- depending on how you draw, 13 or 18 JW Marriotts that are sort of group-oriented, 3 of which you already have, right? Some of which you already have. Is that the right way for us to think about it?

And if you could take us a couple more steps further on the kinds of markets you'd like to be in or not like to be in and help us whittle that down so we can clearly define your TAM.

Yes. So David, I would say that's the way to think about it. That's kind of the starting point. In addition to the assets themselves, obviously, like we have with Gaylord Hotels, we want to be in strong group markets. We want to have a complementary distribution to our Gaylord portfolio because there is some interaction between the 2. And we want to find the right quality asset at the right price.

So it's -- like the Gaylord Hotels business, I think that as we think about a broader JW strategy, it will be group oriented and it will be in strong group markets. And so I think that it's a handful of properties, right, very high-quality properties that have synergies together that we're looking to -- that we would look to add to our portfolio should they become available.

Our next question comes from Stephen Grambling with Morgan Stanley.

On your comments about some shifts around some of the other businesses and maybe there's this dichotomy between the large conventions and group activity versus some of the smaller ones filling in. I mean, I guess if you step back, are you seeing any change in the types of kind of new customer relationships, whether it's by industry or type relative to the existing? And then also, do you generally view any of those shifts as being kind of a leading indicator on how maybe pricing power will evolve going forward?

Yes. We've talked at length in the past about our efforts to break in deeper into the fintech market, and we see a tremendous amount of growth there. And we are having great success with that. But the challenge for us has always been the lack of availability because we're booking a lot of larger groups in the longer term, and there's not always a lot of availability left in the shorter term. And we made some calculated decisions to leave a little bit more availability in certain spots and are having great success with that.

And I would tell you that as folks are getting into the hotels and seeing the offering and experiencing the service levels, it's very encouraging to us that we're making the right bets. And you can see that both in the banquet spend, the ADR that we're achieving and the margins that are being delivered to the bottom line, and we believe that will continue. But fintech has been one of those areas that we've really gone after quite a bit.

Other than that, I mean, we're really well deployed against all segments of the industry. We don't overly rely on any single segment or sector. And it's more about just growing relationships and expanding how much of a meeting planner's book of business we're able to capture. And the whole hypothesis we were talking about a moment ago on Palms and Grande Lakes is a great example of that, where we're capturing a group's largest pieces of business at Palms, and now we're going to capture some of their smaller pieces over at Grande Lakes and the 2 properties work together. And so we see lots of indications that the strategy we're pursuing is going to continue to pay off.

Group mix or industry mix is really not the -- what we look at for kind of leading economic indicators, it's really around group behavior generally, whether that's lead volume, booking pace, attrition and cancellation on property spending. Those are the things that we monitor kind of in real time to understand how the meeting planner is feeling and kind of where demand is headed. And I think right now, as we look at all those indicators, everything looks quite good.

Our next question comes from Duane Pfennigwerth with Evercore ISI.

This is Peter on for Duane. Just quickly on the CapEx change, given this shift in timing, which seems to be putting more CapEx spend into 2026. Can you just give us a framework of how you think about CapEx for next year, maybe some of the projects that you have on deck and specifically, any updates on the potential Rockies expansion?

Sure. Again, just to reiterate, that change in the full year spend on capital is just due to increased visibility as we've gone through more of the year. We've got a couple of months left and understand where that was going to shake out in terms of the range of what we previously had. It's going to be at the higher end of the last range that we gave. So we narrowed it. And given the level of overall annualized spending for the year, I think it's a relatively small shift from our standpoint due to timing.

Again, no change to project level budget costs or timing and no pull ahead. It's really a function of when that cash is really going to spend in these last couple of months relative to the beginning of the year when we cut over. We have finished the Gaylord Texan rooms renovation. You heard that and saw that manifest itself in great results in the third quarter.

The Hill Country renovation is progressing as planned with the rooms there, the lobby and the event lawns that will begin coming online in early first quarter 2027. The meeting space expansion at Opryland continues to make tremendous progress and will be available midyear 2028. And as you mentioned, the Rockies expansion remains the biggest project that we haven't yet put shovels in the ground on. We continue to make progress towards that date, and we'll be able to update you when we have more on that. I think that's around the horn, the biggest projects.

Yes. The only one I would add to it is Opryland is now due for some rooms renovation activity, and we'll be undertaking some of that in 2027 for the Magnolia and Garden sections of the hotel. And really, what meeting planners are already responding really well to is kind of reimagining those rooms that are built in the '70s and '80s, and we're going to look to move walls around and really enhance the product offering there. So that will take place mid next year is when we'll kick that off.

Our next question comes from Jay Kornreich with Cantor Fitzgerald.

I wanted to go back to external growth and just get a sense of what your appetite is for that going forward. I guess following sizable acquisitions last year and this year and especially the hotel fundamentals across the country continue to improve, is there a growing appetite that continue stepping on the external growth gas pedal and maybe maintaining this pace of a meaningful acquisition each year going forward?

I would tell you that right now, we're in the digestion phase. We want to make sure that we're delivering against our objectives that we set out for both Desert Ridge, Hill Country and Grande Lakes. And at the end of the day, we're not just trying to build scale. We're trying to build a very targeted portfolio with the right properties.

And so from an acquisition perspective, we're going to continue to be very, very selective. Obviously, we don't always control the timing of those acquisitions, but we can control what we buy. And we're not just trying to grow scale. We're trying to do something very specific. But beyond acquisitions, I would say that we have a tremendous amount of continued growth and capital deployment within our existing portfolio at arguably higher returns than acquisitions, right?

When you think about things like adding rooms at the Rockies, the meeting space, continue adding meeting space at Opryland like we have underway right now, potentially adding rooms in the future at Desert Ridge or Hill Country, some of the food and beverage work that we're doing and adding seats to drive incremental spend. There are lots of opportunities for us to continue to deploy capital at high rates of return regardless of the size of the portfolio.

Our next question comes from James Feldman with Wells Fargo.

This is Conor on with Jamie. Maybe if I could dig a bit more into the improved 2027 and 2028 pacing. You've also mentioned the SMERF customer, but can you walk us through anything that's changed in demand versus last quarter? Who's booking space? And for 2028, how many room nights are you deliberately holding for premium corporate groups?

There are a couple of questions there.

Yes. Anything that's changed in terms of our 2027 in light of the fact that we've improved 130 basis points from the last report in terms of our revenue positioning for 2027?

Yes. So on the 2027, and then I'll hit the space for 2028. On 2027, our growth, again, we've done a great job of filling some need dates, which are periods when holidays or low group travel are normally occurring. And so that has been a great step forward for the sales team here recently. And then I talked about filling some of those back half patterns.

So our '27, I would say our association demand, corporate demand looks very, very good from a lead volume perspective. We're seeing great conversion into room nights. So nothing has dramatically or materially changed on that front. We're just getting more efficient and the sales team is doing a really impressive job of filling some of those harder to fill patterns so that as you enter the year, you have some of the very best patterns left to fill into.

As it relates to 2028, if you recall back in the first quarter, we made the decision to scrub down or slip or however you want to -- the term we use is slip, open up more space availability and more rooms availability into 2028 by going through and taking a very intentional detailed look at how groups will perform given more recent history and removing room nights in space that we think they will not perform to reflect that recent history. That has proven to be the right decision for us.

And to your question as far as what we're holding open, I'm not saying -- I wouldn't say that we're necessarily holding it as much as we're making more available through that scrubbing process. And as a result, our pace for 2028 improved 32,000 room nights from the last time we spoke to you all back in early August. So as we're opening up earlier for some of that corporate demand and making more space available for them, we've seen great results and folks responding and filling up that space.

Patrick, I would say that one thing that has changed is the capital projects that you and the team have been prosecuting over the last 3, 4 years have by and large, come to reality. And the meeting planner is now seeing that product rather than beautiful renderings. And from the interaction I've had with a few of them, they've been blown away by what we've done, particularly over here at Opryland.

Yes. To your point, I had a conversation with a meeting planner who has always been a huge fan of Palms, Texan and Rockies and has always said, "No, Opryland doesn't necessarily fit what we're looking for." That meeting planner toured through what has already been accomplished and what's underway and what will be delivered by mid next year or the end of next year, and the response was, "We're coming to Opryland, how quickly -- we got to figure out how quickly we get in here." So again, to Colin's point, it is changing the perception of what folks think about Opryland. And so this CapEx investment is truly driving value for them.

And just, again, a little bit of an advertisement to you, Patrick and the team. Opryland a decade ago was $350 million of revenue and $100 million of EBITDA. Today, Opryland, basically the same amount of rooms is $500 million of revenue and $200 million of EBITDA. It's quite remarkable what has happened. There's not another convention resort in the nation without a casino that looks anything like that.

Yes. And we think she still has a long way to run.

A long way to run. Mark alluded to it. There's a high probability that within a year or 2, we may be making about more hotel rooms over there, which is mind-blowing to me. Okay.

We've got time for 2 more, maybe.

Is there anyone else?

We have a question from John DeCree with CBRE.

I think you provided really good detail so far. So maybe one, are you seeing any change in trends in terms of length of stay or length of bookings for any of your customer cohorts, premium group, regular group or leisure? Are people staying longer or shorter? And anything to read into that?

There's been a material change. It varies sometimes group by group, but there hasn't been any material change either on the leisure side or on the group side.

Yes, length of stay and booking window both have remained pretty consistent.

Our next question comes from Chris Darling with Green Street.

On the Grande Lakes acquisition, I want to say that's the first example of you acquiring an asset in an existing market. I'm hoping you could speak to the opportunities and/or challenges that might present. And is Orlando really sort of just a unique example given the size of the market? Or might there be opportunities to sort of selectively concentrate further in other markets over time?

Well, certainly, the size of Orlando played into our decision. We were essentially underrepresented in that market, given that it's the #1 meetings market in the country with just the Palms. But to your point, I think that it is an opportunity that as we kind of sort through it over the next few years, we'll get a better understanding of can we co-locate these products either through acquisition of other brands or potentially through construction of additional room product on current campuses and have multiple brands.

In terms of the synergies, we think there are tremendous opportunities both in the market and then at the portfolio level with Grande Lakes. In the market with the Palms, Patrick's team has already begun working with the management teams there on opportunities to not only consolidate and manage costs and some of the back-of-house functions, but also in terms of how we think about revenue management across the total portfolio of rooms in that market, how groups share both facilities, as Patrick mentioned earlier, as well as the cost side.

And then on the -- from a portfolio perspective, we've talked about this a number of times, but there is a rotational opportunity on the JW side, like we have with the Gaylord Hotel side in terms of taking these JW loyal customers and rotating them not only between Hill Country and Desert Ridge, but now with Grande Lakes.

The only other thing I might add to that is the fact that when you look at other existing markets, Chris, we would also have the consideration of the unique aspects of that particular property that we already own. I think your question was specifically does Grande Lakes as an acquisition in a market where we already have a property, how do we think about that in markets where we already own properties?

Orlando was unique in that there was no additional space on that ground lease land, and we've already added 300 rooms. When you look at, say, Rockies, everyone knows, as we've discussed several times that the next opportunity within that market is to add additional inventory to our existing hotel given that we can leverage the existing infrastructure and the returns on that would be superior potentially to -- relative just to another ground-up -- or excuse me, another acquisition within that market.

So I think you would want to consider whether or not we have other land opportunities, what other capital deployment, capital allocation we have within those markets. So it's a holistic equation about how we might look at that.

And I think the other thing is, from the long game, we look at that market, Orlando is today the most important convention market in the country. It also was 1 or 2 with Vegas. Vegas has sort of been priced a little aggressively here over the last 2 to 3 years, and that is one of the reasons why Vegas as a market has sort of the bloom has gone a little bit off the rose. And we're taking a long view on this. And Jen is 100% right, the fact of the matter is we're pretty landlocked at the Palms, and we don't have the ability to fundamentally add another 500,000 rooms there over the course of the next decade. And this acquisition gives us another very good tool.

But there definitely are strong markets out there that we would take a look at and consider this opportunity. I mean, think about this. The Palms and Grande Lakes share less than 17% of their groups on the books. So the overlap is minimal between 2 properties that are only 9 miles apart. And so where you have a strong market, that same dynamic should exist, and we believe it does. And then that rotational strategy really starts kicking in because we're rotating through the JWs, but then also able to share groups between in market. So your sales function and your revenue management function may function as a single entity. So we think the opportunity could replicate itself in other places.

Okay. Liz, do we have anyone else in the queue, if not?

No further questions at this time.

Okay. Well, thank you, everyone, for your time this morning. And if you have any further questions, you know where we are. Thank you. Liz, thank you.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Welcome to Ryman Properties Second Quarter 2026 Earnings Conference Call. Hosting the call today from Ryman Hospitality Properties are Mr. Colin Reed, Executive Chairman; Mr. Mark Fioravanti, President and Chief Executive Officer; Ms. Jennifer Hutcheson, Chief Financial Officer; Mr. Patrick Chaffin, Chief Operating Officer; and Mr. Patrick Moore, Chief Executive Officer, Opry Entertainment Group. This call will be available for digital replay. The number is (800) 757-4770, with no conference ID required. [Operator Instructions]

It is now my pleasure to turn the floor over to Ms. Jennifer Hutcheson. Ma'am, you may begin.

Good morning. Thank you for joining us today. This call may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements about the company's expected financial performance. Any statements we make today that are not statements of historical fact may be deemed to be forward-looking statements. Words such as believes or expects are intended to identify these statements, which may be affected by many factors, including those listed in the company's SEC filings and in today's release.

The company's actual results may differ materially from the results we discuss or project today. We will not update any forward-looking statements, whether as a result of new information, future events or any other reason. We will also discuss non-GAAP financial measures today. We reconcile each non-GAAP measure to the most comparable GAAP measure in exhibits to today's release.

I'll now turn it over to Colin.

Thank you, Jen, and good morning, everyone. We are pleased to have delivered another standout performance this quarter, but more importantly, we're encouraged by what it says about the strength and resilience of our business model. While the broader economic environment remains dynamic, we continue to see customers prioritize the kind of experience our portfolio is designed to deliver.

This quarter reinforced several themes we have discussed consistently over the years. First, the demand for high-quality group meetings experiences remains healthy. Second, our strategy of attracting higher-value customers across all segments continues to gain traction. And third, the investments we're making across the portfolio are strengthening the competitive position and long-term earnings power of our assets.

Importantly, these themes build on one another in ways that strengthen our business over time. Our scale and differentiated offerings allow us to attract premium business and deepen customer relationships, which in turn drives stronger spending trends and greater visibility into future demand. That visibility then helps us allocate capital with confidence. In turn, we continue to reinvest in our assets and businesses in ways that further enhance our competitive advantages and create long-term shareholder value.

To take one example, last month, we celebrated an important milestone at Gaylord Opryland with a topping off ceremony for the meeting space expansion project, marking the completion of the expansion structural framework. When completed, this investment will enhance Opryland's ability to attract more premium groups and further strengthen its already differentiated competitive position.

Gaylord Opryland is a remarkable asset, and a large part of the resort next year will be 50 years old. But today, it is, quite frankly, the most successful non-gaming resort in the nation. 25 years ago, when Mark and I turned up at this hotel, it generated about $57 million of EBITDA with virtually the same room count as it has today. Through periods of financial crisis, floods, COVID and the like, we've built a successful group rotational strategy, enhanced the leisure aspects of this hotel through things like SoundWaves and holiday program. And this year, we estimate Opryland will cross $200 million of adjusted EBITDAre. This is quite a transformation and underscores the power of our strategy.

The same philosophy guides our approach to our newly acquired JW Marriott Hotels. These are exceptional assets in attractive destinations, and we continue to see opportunities to create additional value through thoughtful capital investment, portfolio synergies and increased customer rotation across the portfolio. While we remain early in that journey, the progress we are seeing continues to reinforce our confidence in this original thesis.

And finally, our entertainment business also continues to demonstrate the value of the platform that we have built. The strength of our brands, venues, customer relationships create opportunities to grow across multiple businesses, geographies and customer touch points, reinforcing the strategic value of the platform as a whole. We built a great business. And I'm very proud of what we've accomplished with our entertainment business and its impact on the city of Nashville. And I feel very, very confident that country music, Nashville visitation and our great businesses will continue to grow.

Last weekend, I traveled over to London to be with Luke Combs when he sold out Wembley Stadium for 3 consecutive nights, each night attracting 85,000 fans. This is on top of sold-out concerts in Edinburgh and Dublin. This has never been done before and reflects the revolution that is taking place in country music. In time, these new fans will be finding their way to the U.S. and to the city of Nashville, thus growing the underlying value of our business.

Now on that front, as we've initially disclosed in June, our Board advanced -- advised by Morgan Stanley continues to evaluate possible new investors or partners in OEG with the goal of providing the business with greater independence while creating value for our shareholders. The ongoing discussions are with select potential investors whom the Board believes may meet our criteria for partnership with OEG. The company has not entered into any agreements with respect to a potential investment by a third party in OEG, and there can be no assurances that any definitive agreement will ultimately be reached. Our focus remains on pursuing a path we believe will preserve OEG's legacy while positioning the business for continued growth and enabling us to continue as a stakeholder.

As we look ahead, we are very excited about the long-term trajectory of both businesses. While we remain mindful of the broader macroeconomic backdrop, the underlying demand we see in our businesses remain healthy. The strategies we've been executing are producing the outcomes we expected and the investments we've made across the portfolio are enhancing both the quality of our assets and the future growth opportunities. We remain on track to achieve the '27 financial targets we set out in early '24, and we look forward to updating you on our continued progress.

With that, I'll turn the call over to Mark to discuss the quarter and the operating trends in greater detail.

Thanks, Colin, and good morning, everyone. I'll provide more color on our operating performance and business momentum before discussing our outlook for the remainder of the year. As Colin mentioned, our same-store hospitality business delivered results ahead of our expectations coming into the quarter. Same-store RevPAR and total RevPAR growth exceeded our expectations by approximately 2.5 points each, while adjusted EBITDAre outperformed by approximately $7 million.

The RevPAR beat was comprised of equal parts group and leisure outperformance, which, together with strong group catering contribution drove the total RevPAR beat. The adjusted EBITDAre outperformance was primarily top line driven, supported by continued strong operating discipline. Let me provide some additional details on each customer segment.

In our group business, similar to the first quarter, the portfolio continued to benefit from strong in the month for the month trends, including ADR upside and stronger catering contribution relative to our expectations. Group ADR increased 7.5% year-over-year, approximately 3 percentage points better than our expectations, driven by stronger-than-expected mix of higher-rated premium group customers. Rate growth was broad-based across all segments, led by SMERF, which includes social, military, educational, religious and fraternal groups.

As we've discussed, the objective of our premium group strategy is to attract higher-rated business across all group segments, and this quarter provides a clear example of that strategy translating into stronger pricing performance. Catering contribution per group room night, a proxy for spending per attendee increased nearly 13% year-over-year, approximately 6.5 percentage points better than our expectations. The outperformance was driven primarily by stronger spending by corporate groups at Gaylord Palms and association groups at JW Hill Country. The group catering results at Gaylord Palms provide another compelling example of our premium group strategy at work.

Higher-rated corporate group room nights increased 31%, driving a 63% increase in catering contribution per group room night. This shift towards higher-value business produced the highest second quarter catering contribution in the property's history. Together, these dynamics reinforce our confidence that our premium group strategy is translating into higher rated business, stronger customer spending and enhanced revenue productivity. In our leisure business, ADR was the primary driver of year-over-year growth as strong group business on the books and room renovation activity at Gaylord Texan and JW Hill Country constrained leisure room availability.

Relative to our expectations, nearly all of the upside was driven by performance at the Texan, which benefited from market-wide World Cup-related rate compression. As a byproduct of these trends, several properties delivered record performance during the quarter. Gaylord Palms, Gaylord Rockies and Gaylord National each achieved record second quarter revenue and the Palms also delivered record second quarter adjusted EBITDAre. In addition, the same-store portfolio outperformed its competitive set during the quarter, bringing the trailing 12-month average RevPAR index at the end of June to nearly 130% of fair share, an increase of 6 points year-over-year.

Our forward-looking business indicators also continue to trend positively. During the second quarter, we booked more than 768,000 same-store gross group room nights for all future periods, up 6.7% year-over-year. ADR on those bookings reached a new quarterly record of approximately $310, an increase of 8.6% year-over-year and 2.3% above the prior record.

Net group rooms -- room nights booked for all future periods also increased year-over-year, reflecting healthy underlying demand net of normalized attrition and cancellation activity. Corporate customers continue to account for more than half of the room nights booked during the quarter, consistent with our group strategy. As of the end of July, same-store group rooms revenue on the books for all future periods was up 8.8% from the same time last year, representing a 120 basis point sequential improvement from the end of March.

ADR on the books for all future periods continues to pace in the mid-single-digit range, while room nights on the books are higher than they've ever been at this point in the year, even excluding the addition of the JW Hill Country in 2023. Looking ahead to 2027 and 2028, we remain focused on growing the corporate group base as part of our premium group strategy. And as of the end of July, group rooms revenue on the books for 2027 is 3.2% higher than the same time last year for 2026, while 2028 is down just 50 basis points.

For both periods, the year-over-year dollar increase in revenue on the books has improved since the end of March. Importantly, ADR pace in both years, which we view as the most durable component of revenue pace, continues to trend in the mid-single-digit range. We remain confident in our ability to deliver the production required to achieve our 2027 goals, supported by near-record corporate lead volumes, a healthy late-stage pipeline and favorable pattern availability.

I'll now turn to the JW Desert Ridge, which delivered another terrific quarter. Group business performed in line with our expectations and was the primary driver of RevPAR and total RevPAR growth compared to last year. Consistent with our strategy to remix demand at the hotel, group mix increased nearly 13 points year-over-year, which drove growth in catering revenue. The higher mix of group business also compressed leisure inventory, supporting stronger-than-expected leisure ADR in every month of the quarter.

As a result, the hotel meaningfully outperformed its competitive set during the quarter with its RevPAR index share increasing 18 points year-over-year. These results demonstrate that our JW Marriott portfolio strategy is working. The synergies we've identified during the acquisition process are driving stronger operating performance and competitive share gains at what was already a highly competitive asset. And looking ahead, group rooms revenue pace for these properties is quite strong, reinforcing our confidence in both the strategy and the opportunity ahead.

Now turning to entertainment. The second quarter results here were also terrific. Adjusted EBITDAre increased nearly 30% year-over-year to a new quarterly record, driven by strong execution across our recent growth investments. Southern Entertainment's two largest festivals finished ahead of expectations, supported by strong lineups, healthy consumer spending and disciplined execution. Our artist-centered venues, Ole Red and Category 10 also performed well. And in fact, in June, Category 10 Nashville generated the highest revenue month ever of any Ole Red or Category 10 venue in the portfolio. These results reinforce our confidence in the growth opportunities coming online over the next 18 months.

Finally, I want to spend a few minutes on our outlook. As we noted in the press release, we raised the midpoints of our guidance ranges for same-store hospitality and the JW Desert Ridge. At the midpoint, the $10 million increase to same-store hospitality adjusted EBITDAre incorporates the $7 million second quarter beat and a $3 million increase to our outlook for the back half of the year, driven entirely by a stronger group base. The $1 million increase to the JW Desert Ridge reflects only the second quarter beat as seasonality for that hotel is heavily weighted to the first half of the year.

As you think about our outlook for the second half, I'd highlight a few points. First, while we continue to monitor uncertainty around interest rates, inflation and the broader economic conditions, to date, we've not seen a meaningful impact on demand trends, customer behavior or future booking activity. As a result, our outlook assumes a relatively stable operating environment and is based on the visibility we have today, including what's currently on the books and continued normalized attrition and cancellation trends.

Second, we continue to expect roughly flat same-store leisure rooms revenue performance, which primarily reflects limited rooms availability for leisure guests due to the stronger group base. Third, we've maintained a conservative outlook for ICE given our limited visibility into ticket sales and the fact that much of the season's success is determined during the final 2 weeks of the year. That said, Marriott this week -- this year -- that said, Marriott announced this year's themes a few weeks ago and early customer reception to 3 new themes, Home Alone, Harry Potter and The Nightmare Before Christmas has been encouraging.

Lastly, I'll make a few comments on seasonality. The midpoint of our same-store RevPAR guidance assumes low to mid-single-digit growth in the third quarter and mid-single-digit growth in the fourth quarter. The sequential acceleration from Q3 to Q4 reflects stronger group occupancy growth in the fourth quarter and greater rooms availability at the Texan following the planned completion of rooms renovations in August. The midpoint of our total revenue guidance assumes low to mid-single-digit growth in each of the remaining quarters with stronger growth in the third quarter.

We continue to expect total RevPAR growth to outpace RevPAR growth in the third quarter and RevPAR growth to outpace total RevPAR growth in the fourth quarter. The fourth quarter dynamic primarily reflects lower expectations for attrition and cancellation fees, the natural outcome of a more favorable group environment and a more difficult comparison at Gaylord National due to record catering contribution last year and some modest disruption associated with a planned light touch meeting space renovation.

We continue to expect third quarter to deliver the strongest adjusted EBITDAre margin growth of the year. And for the entertainment business, we continue to expect adjusted EBITDAre to be more heavily weighted to the fourth quarter. Stepping back, the message from this quarter is straightforward. Group demand remains resilient and meetings, attendance and customer spending trends continue to generate near-term upside. The investments we've made over the last several years to enhance our assets and our customer value proposition are enabling us to capture that upside and outperform our competitive sets. And our JW Marriott portfolio strategy is delivering on its thesis. Taken together, these trends reinforce our confidence in our outlook for the balance of 2026 and the 2027 financial targets we've set a few years ago and the longer-term earnings growth potential of the portfolio.

Now I'll turn it over to Jennifer to discuss our balance sheet and capital allocation.

Thanks, Mark. We ended the first quarter with $366 million of unrestricted cash on hand. In addition, we held $32 million of restricted cash available for FF&E and other maintenance projects. Both our corporate and OEG revolving credit facilities were undrawn, resulting in total available liquidity of nearly $1.3 billion. At the end of the quarter, our net leverage ratio based on total consolidated net debt to adjusted EBITDAre was 4.2x. We continue to believe our liquidity position and leverage profile provide meaningful flexibility to fund our capital plans, support our dividend requirements and execute our long-term strategy.

Regarding capital expenditures, we now expect to spend approximately $400 million to $500 million in 2026, an increase of about $50 million at the midpoint. This increase reflects improved visibility into the timing of project cash flows as well as the decision to accelerate certain projects previously planned for 2027. These include facade work at JW Hill Country, where we have decided to complete concurrently with the rooms renovation ongoing there to minimize disruption, along with water amenity improvements at Gaylord Texan. The overall scope of our multiyear capital plan remains unchanged, and the projects we have underway remain on time and on budget.

Regarding our dividend, it remains our intention to continue to distribute a minimum of 100% of our REIT taxable income through dividends over time. And finally, as it relates to OEG, while our strategic discussions remain ongoing, Atairos' 4-year anniversary IPO request put right is currently unexercisable.

With that, operator, let's open it up for questions.

[Operator Instructions] And we'll take our first question from Dan Politzer with JPMorgan.

I wanted to touch on one of the big themes this earnings season, which has just been owner fees and relations with some of the brands. Certainly, there's been a lot in the press, and I'm sure you've been listening in on other calls. I guess, where do you think stand in terms of where you are in terms of the relationship with Marriott and some of the other brands? And how do you think about management fees and royalty rates as it relates to your properties on a go forward?

Well, I mean, we can certainly speak to Marriott, really don't have any view on the other brands. Look, I would tell you that overall, our relationship with Marriott is quite good. We have a very positive relationship. I think that on most issues, we're fairly aligned. Obviously, like all owners, we're always focused on fee revenue, cost structure and how we drive the most profitability from our properties in our portfolio. But broadly speaking, what I would tell you is that our relationship is good. And I think that it's -- we're fairly well aligned with Marriott and what the objectives are for our business.

We'll move next to Smedes Rose with Citi.

I wanted to just ask you a little bit about the potential sale of OEG. Just -- I guess my question is really kind of why now in terms of timing. You've obviously talked about it for a while. You've also been connected in the press with a large potential, I guess, would be the deployment of proceeds. And I'm just wondering, are those things related? Or kind of how are you thinking about what you would do with the money if you were able to dispose of OEG?

Smedes, it's Colin. I'll start, and I'll pass it off to my colleague, Mark. In terms of OEG, the reason we went down -- we proceeded down the path of having conversations with multiple groups. We were very clear, I think, in the earlier press release that we put out, which was that we had received a lot of unsolicited inbound calls because of what is going on in live entertainment and music right across the planet. This is a very, very attractive time to be an investor in product like this.

And we chose to sit down and have discussions with groups that have knocked on our door. And then there was this Bloomberg article back in June that referenced that we were doing this. We put out disclosures at the time and told people what we were up to. So that -- we've been going down this path simply because these organizations wanted to sit with us and talk to us about investing in this business and helping us grow this business. And I think we've been really clear all along that our goal here is to stay part of this business because we have very clear views about the long-term potential of this business.

And as I said in my prepared remarks, we -- right at this stage, we haven't entered into any agreement with any of the organizations that we're in communication with at this stage. And at any time we have something more concrete to say, we will disclose it and let you all know.

And then in terms of -- I'm not going to comment on the recent article linking us to a particular asset. But what I would say is that we -- the conversations that we've been having with OEG are not in any way, shape or form related to the growth of our hotel business. It is -- these 2 businesses, we have 2 wonderful strategies, enough capital to seed these businesses in the way that we think they should be seeded. And so these 2 speculations are completely unrelated and unlinked. Anything else you want to add to that, Mark?

No, I would just say, Smedes, any transaction we did would have to comply with REIT rules, obviously, which would include -- we would have to receive proceeds over a period of years as part of that compliance. And just given the tax basis that we have in the entertainment business, we would likely dividend the proceeds from any transaction if one were to occur.

We'll move next to Aryeh Klein with BMO.

Maybe somewhat related to Smedes' question on a potential acquisition. You did highlight the JW portfolio strategy in your remarks. What have you been seeing on that front from a cross-group selling or rotationary standpoint? And just maybe what you see as the benefits of owning multiple JWs?

Aryeh, this is Patrick Chaffin. Thanks for your question. Yes, we continue to be very pleased with the rotational strategy that's developing with the JWs that we own. Life to date, since we put an above property dedicated team into lead generation, we've booked about 129,000 multiyear rotational group room nights.

So that's with 2 resources just dedicated to these 2 JWs, and we continue to see additional growth and expansion in that opportunity. So we're seeing more and more rotation between those 2 JWs, and we're seeing more and more overlap into the Gaylords. And so we're very pleased with how that's developing and the results that we're seeing on that 129,000 room nights.

We'll take our next question from Patrick Scholes with Truist Securities.

With Marriott rolling out the ITR, what percentage of your hotels do you believe would qualify for that?

Patrick, this is Patrick Chaffin. We are still working through the details on that. Our above property team at Marriott is still trying to compile and understand what they think the impact will be. So that's something that is newer to us, and we'll be coming back with more information. But at this time, they're not really 100% comfortable saying what they think that impact would be.

We'll move next to Chris Woronka with Deutsche Bank.

Very nice quarter. I was hoping maybe you'd spend a minute talking about the different buckets of your group business going forward, associations and corporate and whatever other buckets you might want to throw in there. And the question is really where do you see the biggest pricing opportunity? I mean, I think we know that there's no more -- not a lot of big boxes being built. And you guys have talked in the past about seeing more strength in pricing as you go forward. So just kind of curious as to which segment or which bucket maybe has more opportunity based on where their prices are today or pulling -- extending the booking curve and things like that.

We've been strategically shifting the battleship couple of years now, Patrick, moving more towards high-rated group business, and it's paying off huge dividends. You want to just...

Yes, that's a great question, Chris, and something I'm actually very excited about. I think we're all very excited about. We are trying to mix towards the higher-rated corporate room nights, and you're seeing that in our results. You're seeing that in our production as well. If you look at the rest of this year, we're probably up about 3 points in some of our corporate room nights on the books versus same time last year. Our corporate leads continue to see great growth.

But if you look at second quarter, second quarter saw rate growth across all segments, not just corporate so association and SMERF. And what's going on there, and we've talked about this, is we're investing into the assets to enhance the value proposition. We're working to identify the lower-rated groups that maybe we either need to move up on the scale of pricing or say goodbye to them. And then we're targeting new groups to bring into the system, and that is having great results for us.

And so if you look at what we booked in the second quarter, there was a tremendous growth on the SMERF room nights that we booked in that quarter, but it was at a much higher rate than we've ever seen in the past. The rate was actually up over 200%. So we're moving everybody up to scale, and I think that's a result of targeted identification of new groups as well as investment into the hotels. One that I would call out, you've seen the results at Palms and Rockies from those investments.

There's a lot of investment going on into Opryland right now, and we've hosted a number of events with meeting planners at that hotel just here in the past few weeks. And the excitement level is through the roof as people are seeing what we're doing and saying, we want to get into Opryland, we want to experience all the new things that are happening there. So growth across the board, continue to identify new groups, especially on the corporate side to bring in and remix the hotels and are having great results across the board.

And looking inward, looking at ourselves, the performance looks good. But when you look at our performance relative market by market to the competition, we're growing our share. So this strategy is not being replicated by our competition simply because they don't have the physical assets to be able to attract this higher-rated group business. I think we've seen that. Mark, you referenced that with what has been accomplished with the JWs.

We talked about that in the script in terms of growth of our market share.

Yes. Chris' question is a very important question for us. It's very central to our strategy right now. All right.

We'll move next to David Katz with Jefferies.

I wanted to just get a sense for your appetite inclination, general feelings or any updates on potential hospitality acquisitions. It's not the question that I'm always asking Mark and Sarah about the Pacific, but just generally speaking, we're hearing some things out in the market and wondered what your appetite and inclination is?

Yes. I would say -- as Colin said, we're not going to comment at all as it relates to any rumors or speculation that's in the market currently. Broadly speaking, David, as you know, we have a very, very focused strategy. And so if you think about that in terms of acquisitions, obviously, then there aren't a lot of targets out there for us. And I think that's one of the greatest strengths of our portfolio is the competitive environment that we operate in. There's no new real product being built, and there's very limited product available. And that's -- frankly, it's one of our greatest strengths.

David, you followed us, and we've known each other for a long, long time. And I think we've been very, very consistent over the years. We've been very clear on what we're not interested in. We don't want to replicate what so many of our competitors do, which is just bomb into a market, go buy 300, 400-room hotel and pay out for it and hope like hell the market performs well.

We've been very, very clear over the years that there are a handful of big beautiful hotels in certain markets that we know our customers want to go to. And those are the businesses that we track and keep our eyes on. And candidly, this is why we acquired that hotel in San Antonio that we had looked at 10 years ago. and the one in Phoenix that we had -- and Mark, you and I looked at that hotel, I want to say about 8, 9 years ago. So we've been very clear on what attracts us, and we've been very clear on what does not attract us. So we're going to continue down that path.

We'll take our next question from Rich Hightower with Barclays.

Just to circle back a little bit on this idea of higher rated group mix and helping to sort of drive forward ADR. Are you able -- I guess, a 2-part question here. Are you able to parse out for us the impact of mix versus sort of underlying price increases kind of across the board? And then secondly, Colin, you did mention that you're stealing share on the group side. And I'm wondering if you could give us a little more detail on sort of which markets, properties or property types at least you might be stealing more share from?

Patrick, do you want to dive into the detail?

Yes. I would -- so let's talk about the stealing share. If you look at second quarter performance versus '25 and '24, we are seeing results really honestly, across the board where we continue to drive an increase in the amount of share. I mean Opryland, I would say, probably stood out in the second quarter as the big winner. Gaylord National continued to drive. But across the board, we saw folks in our properties continue to drive additional share. But those are the two that really stood out in the second quarter.

When you go to the pricing and mix, we've been on this mix journey for the past few years. And so we continue to see that moving up. But really, what happened just in our second quarter was just more of the result of the investment into the hotels and the excitement level and our ability to drive pricing as a result. So the mix didn't necessarily change. In fact, the mix of what was booked in the second quarter was actually more towards the SMERF room nights, which historically would say, well, that's lower rated business. But again, as I mentioned, we saw higher growth rates in that rate than we've ever seen across our portfolio.

So the mix has been moving in the right direction, but those investments are really coming to bear on our ability to drive that price higher and higher. So it's a bit of a mixture, but I would say in the second quarter, it was more just a result of pricing purely as opposed to a mix shift.

Yes. I think -- just to add to that, I think one of the things that you can attribute to the mix shift is the strength that you've seen in our catering spend as we pick up these premium. And to Patrick's point, our strategy is really across all segments. And so as you move up in each segment, you get higher spend outside the room, whether it's a SMERF group association or corporate. But corporates generally spend more outside than room than the other segments. And so you're seeing that help drive our catering.

And I think that's a message you want to hear from us. It's definitely what we want to see because we don't want to become too overly indexed towards corporate so that if there is a macroeconomic downturn, we've walked away from some of that association business. So for us, it's about marginal changes between those various segments, but maintaining the course and maintaining that strong association base level of business, but moving it up to scale on pricing. So we don't want to over-index on the mix. It needs to be a story of both pricing and mix moving forward.

We'll move next to Duane Pfennigwerth with Evercore ISI.

This is Peter on for Duane. Just one about CapEx from us. The increase of $50 million this year, it seems like that's more of an acceleration maybe shifting out of 2027. Is that correct? And if so, does that free up some more space next year to undertake additional projects that you hadn't yet contemplated?

Yes. Duane (sic) [ Peter ] that is completely a shift an acceleration as we think about what types of projects we're undertaking and what's the most efficient way to accomplish those that -- the totality of projects over time. So you see us consistently make those decisions. We candidly haven't really given any guidance around capital for 2027 yet, but our philosophy in determining what's right for the business and how we sequence that relative to the book -- to the business that's on the books will be taken into consideration when we think about what we undertake capital-wise in 2027.

We'll take our next question from Jay Kornreich with Cantor Fitzgerald.

As we think about T+1 bookings, it seems like the ADR on the books is tracking ahead of RevPAR on the books at this point. So I just wanted to unpack that a bit more, just get a little more clarity as to what level of ADR upside you're seeing for next year? And then should we expect that the typical 50 points of occupancy that you start the year with is likely to be how 2027 is shaping up? Or any reason that occupancy would be higher or lower to start the year than normal?

I mean in terms of what's on the books right now for 2027, we're mid-single digits up on rate and rate is driving the revenue increase that we talked about at 3.2%. And we are -- I would tell you that, yes, we're positioned for -- to be around that 50 points of occupancy. We're right where we need to be at this point. And as we look ahead, we've got -- for '27, we have near record corporate lead volume right now for next year. We've got very favorable pattern availability for next year. And that we have, frankly, a better value proposition next year when you think about the rooms renovations that are coming on at Texan and Hill Country, the meeting space at Opryland.

And then as I mentioned in my remarks, we have a light touch refresh in the fourth quarter at the National on some meeting space that will also help them next year. And just to single out Opryland in particular, with that new meeting space. We're seeing corporate mix on the books for next year, up 14% and year-over-year in '27. And then going into '28, it's high single digits over '27. So we're seeing really nice traction and response from the corporate meeting planner to the investments that we've made in Opryland.

We'll move next to Jack Armstrong with Wells Fargo.

Can you take us through some of the building blocks on the expense side of your business across labor, utilities or anything else that you want to highlight in terms of positive or negative surprise in the second quarter and then the trajectory of those items into the back half of the year?

Sure. Jack, this is Patrick Chaffin again. We target a flow-through of about 40%, and we achieved 46% flow-through year-over-year in the second quarter. I would tell you a lot of that's because of effective labor management. Our average wage rate increased about 3.8% year-over-year, but we held our wage margin essentially flat. So we continue to improve on the productivity front.

The other thing I would really call out is we continue to make gains on procurement. Marriott has talked about that a lot, and we are seeing some gains in their efforts. We've also taken on some of that on our own here at RHP, both on our design and construction side as well as just our vendor relationships, where we're getting -- as our portfolio has expanded, our buying power and scale has improved, and we're able to negotiate on our own very favorable procurement opportunities or contracts. And so we've become much more active in that.

And so second quarter benefited both from really effective margin management on the labor side as well as some of these procurement gains that we've been making both from Marriott and from our efforts and all that coming together. Utilities, we're now up and running with our solar array at Gaylord National, has the ability to provide about 25% of the electricity needs for the property. So we are confident that even though utilities continues to be a challenging area, we're moving in the right direction and making the investments that will allow us to move that downward over time.

And Jack, from a guidance standpoint, the assumption at the midpoint is on operating expenses for the same-store hospitality portfolio is about 3%. So I think that's as good as you're going to hear from just about anybody from a lot of the points that Patrick just mentioned.

Yes. And to Jen's point, I've heard some folks talk about the front-loading of CBA contracts. Our CBA contract is only one hotel and that's at Gaylord National. And we think that '26 is in a great position as evidenced by the first half of the year, and we expect that to continue into 2027. So there's not a lot from an expense perspective that's really keeping us awake at night.

We'll move next to John DeCree with CBRE.

I wanted to take a look at kind of implied back half guidance. I think some of the increase in the same-store hospitality portfolio is kind of the group business on the books that you see. Based on what you saw in 2Q, the higher ADRs than expected, maybe the higher premium customers, is there a potential or does your guidance include any of that higher spending level to carry through to the back half of the year? Or do you kind of expect what you saw in 2Q to kind of normalize when you look at guidance?

Yes. Mark's prepared remarks had a lot of commentary in terms of how we expect the rest of the year to play out. We did have a very good second quarter, and we're very proud of that. You do see some dynamics playing out between third quarter and fourth quarter between RevPAR and total RevPAR. We've seen great outperformance outside the room in banquet thus far. That's -- we'll see how that plays out, but we have a strong book of group business in the back half of the year. And I think that's what's shaping ultimately how we're seeing the second half play out is that strong book of group business at the midpoint, allowing us to raise our outlook for both RevPAR, total RevPAR and adjusted EBITDAre.

Yes. I mean one of the -- John, one of the differences kind of back half versus front half as well is that the RevPAR growth in the back half is going to be occupancy driven versus the first half, which was more rate driven. So that's a dynamic, too, that you'll see in the business. And it will -- we still have really nice margin growth in the back half, but that does influence flow-through, some.

Yes. And if we have an opportunity to maybe outperform, I would say we're really encouraged by what we mentioned earlier on the ICE results with the 3 new themes. That would give us the opportunity to maybe have a little bit of upside outperformance, but we'll be watching that closely. And as everyone knows, transient really comes down to how we perform from Thanksgiving through the end of December. So we'll watch that closely.

Yes. And look, just to give you, I guess, a little bit of confidence in the back half, our reach to the rest of the year is less than where we were positioned last year. So we're in real good shape there. We continue to see strength in terms of ADR and banquet contribution. And then as we mentioned in the script, the new ICE themes, we're very, very excited about those to refresh the product. And it's early, obviously, very early in the selling season, but the initial feedback from consumers has been terrific.

We'll take our next question from Michael Herring with Green Street.

Maybe just going back to the discussion on the JWs. Can you discuss any unforeseen challenges thus far at either the property or market level that you've seen that you could -- maybe that you think could be avoided with any future opportunities?

I think it's been as expected and with a few positive surprises.

Yes. I mean the integration efforts have gone very, very well. The beauty of Desert Ridge was it was turnkey. There wasn't a whole lot of capital required. With Hill Country, there's more of a longer-term master plan that's in place, and we're working through that with the rooms renovation. But I would say the integration has gone very, very well. And we're learning the JWs more and more every single day. But to your point, Colin, I think we're very pleased with how it's gone.

Yes. The only -- on the Hill Country, the other part of that thesis was that, that airport is being expanded in San Antonio, and that expansion will be done in 2028. I think they're adding 14 gates. And so part of the thought process with the San Antonio acquisition was getting a group hotel established in that market as it's bringing on more airlift to deliver larger and more groups.

We will take a follow-up from Rich Hightower with Barclays.

I wanted to maybe ask the share question a little bit differently. I don't know if I was perfectly clear last time. But when we talk about stealing share or gaining share, is that based on a defined comp set for each hotel in terms of RevPAR index, strictly speaking? Or are we talking sort of larger categorical share gains against maybe large group markets where Ryman doesn't have an asset currently. Help me understand the dynamic there when we talk about that.

Rich, that's a great question. Yes. So that is the defined comp set because, as you know, our hotels are pretty unique. And so a comp set is more appropriate because you have to find hotels that are of similar size and scale and breadth and function. And so that is based on their comp sets for each market, and that market may include -- or that comp set may include hotels that are actually outside of a close drive-in area of that hotel. So that is the defined comp set and our performance against it, and we continue to drive improvements as we steal share.

Yes. I think the caveat that Patrick made is an important one. We just -- we don't comp Opryland against Nashville hotels. We comp Opryland against hotels all over the country because of the unique nature of it. And it's the same with our other hotels. They're regional or national comp sets.

It does appear that there are no further questions at this time. I'll now hand back to Colin Reed for any additional or closing remarks.

Only comment was -- only comment would be thank you, everyone, for being on this call, and our business is in really good shape, and we look forward to sharing you more -- sharing with you more information over the weeks and months ahead. So thank you.

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

All right, we're going to jump right into our next panel here, which is our REIT panel. And I'm very excited to have both Ryman and DiamondRock here today.

And really, I think that where I'd like to start off here is that we often hear that REITs get bucketed into a single kind of category, single macro category. But I think that each of you have a very different business in a lot of ways.

So maybe if you can just talk to what sets each of the companies apart from just the broader REIT universe. And then also maybe a little bit about some of the strategic priorities that you're pursuing that you think will continue to differentiate the businesses.

And I'll start -- we'll start closest. I was going to say any of my cynicism doesn't apply to Mark here. But I mean I would say particularly when you look at the public market for hotel REITs, and I do sort of put Ryman sort of in its own special category. But when you look at it, like the majority of the companies that are out there tend to be brand managed, and that's where we -- I think we're a little bit different. We really ascribe to have more flexibility and control in our portfolio.

So we are -- we have about 95% of our hotels unencumbered by brand management. And we also have about 1/3 of the portfolio that's just independent of brand. And again, that comes back to control, whether it's the strategic direction of your asset, control over CapEx, cash of the properties, we tend to be able to drive better margins. That, to be clear, is not the same for every asset that exists in the industry. It's for the types of assets that we go after that we think we can be more profitable. So that's how we really differentiate ourselves versus our peers.

For Ryman, we operate 2 very, very unique businesses. Our core business, the hotel business, we focus on large destination assets that really service the group customer and then also the leisure transient customer. And then we also own and operate an entertainment business that's focused on the country lifestyle consumer. So 2 businesses that are very focused on very specific consumer groups, very unique assets, really irreplaceable assets.

From a brand perspective, it's another thing that makes us unique. All of our hotels are branded with Marriott and operated by Marriott. And having that single owner and manager is an important part of what we do because about 66% of our revenue is recurring as we rotate these customers from market to market year-by-year. And so having consistent ownership where you have the economics aligned and having consistent management where you have the same service model is critically important for us.

What do you think is the most important KPI that you track? And maybe what is the most overlooked KPI that you'd want investors to think about?

I mean, for us, in terms of what we look at and think about every day is really is our booking pace as we look at -- as we look long term, what does that book of business look like when you look out over the next 4, 5, 6, 10 years, what rate is it trading at? And are we on the right demand curve to hit the beginning of the year at 50 points of occupancy that we entered the year with 50 points on the books.

In the short run, we really monitor group behavior. So lead volume, outside the room spending, those types of attrition and cancellation behavior. That really gives us the shorter-term view of what's happening in our business.

Yes. I would say it's not too dissimilar. We're not as group heavy as Ryman is, but we're about 1/3 of our portfolio is group, and we entered the year with about 70% of our business for the year on the books. It is booking pace that I think that's where you begin to see hotel folks get more confident when they feel like they're getting a little more confidence or visibility, I should say, in the future.

And it even matters unlike traditional transient hotels, a lot of our resort properties. We do not rely on group business. You can ultimately sort of yield manage to higher profitability, I think, over time. But the booking windows are different for that than it is a large group business that you folks would have.

No, I think the booking pace is a big part of that. I mean at a very macro level, it's going to be things like private fixed investment, a big one, employment tends to be a big driver of demand in the industry.

I thought you might take it a different way. We had earlier somebody brought up in our private equity panel that they're saying RevPAR sounds great, booking sounds good, but wages going up in a number of markets, cost to renovate, cost to build going up.

So ROI was something that they were trying to ask, are you seeing any improvement there? I mean how do you think about actively return on invested capital and the trajectory there and what's going to drive that?

It's a big focus for us. I mean we, in the last 2 or 3 years, have really become to the point of being accused being a bit of a broken record, really kind of a free cash flow per share driven business. And there's a lot of steps that we can take, whether it's distancing ourselves in some situations where, frankly, being branded doesn't work for that hotel or it's just trying to be much more cost effective around the capital that's required at those properties because the CapEx that's oftentimes required by a brand to be consistent with their brand standard does not make sense for every hotel.

It will make sense for some, but not all. And so we try to be diligent about where we choose to brand and where we choose not to. So from, I would say, an ROI standpoint, I think that's where you will see more variation or polarization to whether it pencils or not.

Look, I mean, to the point you made, costs are increasing, right? But if you look at our advanced bookings, we're growing rate at mid-single digits for the next several years. And that's really being driven by a couple of factors. One, in our segment, there is really no new supply. These are really tough assets to build. They take a long time and they require incentives.

The other aspect is from our capital deployment strategy, having these big platforms allows us to deploy incremental capital into these hotels to drive high-return projects. And so -- and that's what's really driving a lot of our rate growth. As we position these properties more and more up to premium scale, we can drive higher rates.

We heard from that panel too, kind of broad-based strength across a bunch of different types of portfolios. How would you characterize the health of the industry now and the sustainability of some of the trends we've perhaps seen?

I would say that I think what's surprised is maybe too strong of a word, but I think what's been beneficial this year is it feels to me that this is the first time in 5 years where we've had effectively every demand channel working in the same direction, business transient, leisure transient and group.

If you go back to the last 5 years, there was certainly that time in 2021, 2022 when it was all about leisure and it took off. And then as people came back to the office, you saw corporate transient and group follow back and then you could see markets like Florida begin to retrace a little bit. It just feels like this year, we came in with really sort of broad-based strength.

And when you think about a hotel over the course of a 7-day period, you can't sort of kill it just getting like 5 nights during the work week or 2 nights on the weekend. You really have to have all the days of the week working. And so I think that's been one of the reasons why you've had a little bit of an inflection this year in fundamentals. It feels like you're finally finding a normal that's more like the days pre-pandemic.

And look, group has continued to perform well, whether it's short term when you look at attrition rates or you look at outside the room spending, we continue to see groups turning up in spending. Lead volumes are good. We're seeing good rates in terms of future bookings outside the room spending has been terrific.

So group is healthy. We've seen good demand out of leisure. Spring break was positive. Summer seems to be shaping up. And we'll see for us, the holiday period, as you know, is an important part of our year. So we'll see how that performs in the fourth quarter.

And Mark, just to dig in there a little bit on the group side, how has -- somebody had referenced earlier, I keep going back to another panel but I'm sorry I missed -- now, it will be interesting to hear your perspective here because there was a comment about the type of group has changed.

So they were seeing actually weaker trends in smaller groups, but very, very strong trends in larger groups. I guess, are you seeing that same dynamic play out? Is there a shift in that group mix between association, large corporates or other?

I would tell you, I wouldn't call the small group demand weak. What we've seen over the last several years is that most of the growth that's occurring in group business is in large group. So there are more of them and the large groups are getting larger.

And so as you look at what -- the business that we're in with anywhere from 400,000 to 700,000 square feet of meeting space, that large group is really our core customer. And we've seen that for, gosh, the last 3 or 4 years. If you look at the STAR group data, you'll see the same thing where growth in group is in that big meeting segment.

As demand trends have strengthened, are you seeing any change in the transaction markets that comes along with it?

I'd defer to you because we do -- we have a very specific...

You're not buying one of these every day.

And no, there's definitely been an inflection. We are earlier today over at the NYU Hotel Conference, and I would say it's a pretty striking difference that if you think of the industry events that tend to bring all the brokers and owners together, it's NYU now and then it's the ALIS Conference in January out in Los Angeles.

And I would say the prior 3 conferences in early and mid-'25 and also early '26, it felt like they were recycling the same sort of book of offerings. This is the first one where there's definitely a lot more enthusiasm. One of the brokers said that their activity is up 40% year-to-date. It definitely feels like things are turning a corner. And some of that is when you think of it versus last year, call it, April to April last year, when you had Liberation Day, I feel like it had multiple impacts in our industry where we were seeing sort of peak all-time lead volume for group, but very low conversion to someone wanting to sign a contract because there was just a lot of uncertainty in the industry with tariffs that if you're planning like a big trade association event or what have you.

At the same time, interest rate spreads blew out on hotels, and it took a while. I mean I felt like the stock market recovered, and we're still watching that spread come back down. So it just really made transactions difficult. And now you're coming into this year where, yes, borrowing rates are probably 150 basis points tighter than they were this time last year, and there's a lot more visibility on booking trends and patterns this year than there was last year.

It definitely somewhat sharp sea change. I think you were talking earlier, there's probably 2 dozen sort of upper upscale luxury assets in the marketplace right now that is more than I've seen in some time, and they're probably all spoken for.

Do you want to sell into that strength? Are you more likely to be still interested in acquisitions?

It's a little bit of both. I mean, frankly, like we're -- we have more lines in the water than I think we have historically for disposing of assets. We sold one, the small one earlier this year here in New York. And we continue to look at selling assets, but we're also trying to be acquisitive in situations where we can recycle that capital into something that will grow a little faster if it's not our own shares.

On the recycling of capital front, maybe moving just to spending on the existing portfolio. What are some of the biggest ROI projects you're each working on? And how do you think about prioritizing where you are spending those dollars?

Yes. Our -- probably our biggest enhancement project right now is at Opryland. We're building about 110,000 square feet of incremental meeting space. We just finished a large food and beverage and events lawn complex. And we're in the middle of a full ballroom renovation. So we've got -- in total, that's probably $0.25 billion that we're spending across all those projects at Opryland with the intention of bringing Opryland, it's fit and finish up to the level of the rest of the portfolio.

That hotel will be 50 years old next year and to begin to remix that hotel for more premium groups, premium corporate business. That's why we're building the breakout space, but also premium across all segments. So begin to shed some of the lower-rated business that might be in that hotel in higher-rated association, higher-rated SMERF groups, et cetera.

Does that move across the portfolio? Or is that -- do you think that will end up being incremental if you can find out -- find those new kind of meeting folks?

We can find new meetings, but it's also about rotating premium groups that are in our other hotels like at the Rockies who don't rotate through Opryland, we'll now begin to do that. We're seeing that happen.

For us, I mean, we -- for example, last year around this time, we put a property under the knife, we own hotels in Sedona that we ended up upscaling and effectively consolidating them. There are 2 adjacent hotels, but at very different price points. One was sort of $1,000 to $1,200 a night and one was about $300.

And it was sort of bringing the $300 one up to the level of the higher end one. And I think publicly, we've said it would be sort of a low double-digit IRR or cash yield on that, and it's been surpassing that right out of the block. So that can be very impactful. It's funny from a dollar spend standpoint, it can be a fraction of what you guys are spending. But from an impact to our bottom line, it can be very significant. If you're kind of earning a double-digit return on that, it can add a couple of points to your EBITDA growth.

In my intro remarks this morning, I highlighted that lodging was one of the best-performing sectors within gaming, lodging, leisure broadly. It's also outperformed the S&P 500. I think that the hotel REIT space has gotten a little bit of a wrap that there's something broken as being a public REIT versus perhaps either being private or otherwise. How do you think about the pros and cons of being a public company hotel REIT? And how has that changed over time?

Well, look, I think that for the types of assets that we own, the public structure is the right structure, given the size of these assets, the concentration that you have. I think it's -- they're typically not assets that private equity want to hold.

From the perspective of being a hotel REIT, one of the things that I would love to accomplish is getting people to think about us a little bit differently than a pure hotel REIT just because of the nature of our business, some of the characteristics of it, the growth, the stability, it performs more like an infrastructure REIT, frankly, than it does of the hotel REIT.

So I think I've watched this industry for a very long time. And I think 10, 20 years ago or longer, it was sort of sufficient just to be branded. That was kind of the differentiator, if you will. And to own large assets or to own luxury assets. And I think there was this implied faith that ultimately, the owner was somewhat passive in that equation, and you're entrusting the brand to sort of do the right thing for you.

I would say that being a little facetious. But like I would say that there's many times where the brands are doing the right things for their system, but that doesn't mean that it's good for me. And at the end of the day, I always joke that I'm the capitalist, I don't have to believe in their socialism. So it just depends where you want to place your bets.

And I think that what's changed in the REIT space, there's no question. It's been a difficult performer, you guys accepted over the last few years. And I think that that's changing. I think the market has to realize that it is an active investment strategy. You need to be much more hands-on and influencing what's going on at the property level and also taking a different view on branding and management. It's all about trying to drive value there constantly as opposed to just entrusting that a third party is going to do it in your best interest.

Is bargaining power improving from an owner standpoint with the brands?

I think so. I mean we just actually had a franchise agreement at our Westin in Boston come up. It's 800-room hotel at the convention center. It's probably a top 25 convention center market, and there was extraordinarily robust demand because as you know, they're very focused on unit growth. And so I do think there's a lot more flexibility that we as owners can have.

And that's one of the things that really differentiates us versus a lot of the more conventional like full-service folks is that about 1/3 of our portfolio is unbranded and the majority are not brand managed. So to the extent that it's appealing for someone to take key money, that's an option that you have with our assets then you don't have with our peers.

Mark, how do you think about the relationship with Marriott and how that's evolved over time?

As I said earlier, the manager relationship with us is critical because we operate these as a single portfolio as really as a single almost not operating business. And so who we have and what their relationship is with the meeting planners and their reputation is critical.

And this goes all the way back to when we converted from an operating company to a REIT in 2012, where we did a significant amount of primary research with meeting planners, and Marriott was consistently ranked as the #1 manager for large meetings and part of what drove us to select them as our manager.

I think that given the uniqueness of our portfolio, the scale of it and the capital that we deploy into those assets, it does give us a lot of leverage and buying power with Marriott. But the relationship is quite good. And overall, they do a tremendous job.

And Jeff, you have a chart in your deck, I think, showing higher EBITDA per key of third-party managed properties. Now every asset is a little bit different. It seems like that's clear from the dichotomy between the 2 businesses. But are there situations where brand managed makes sense in your portfolio?

For sure, for sure. I mean we have -- I mean, the property that really kind of leaps to mind is we only have 2 that are brand managed, but our Chicago Marriott, it's 1,200 keys. It's on Michigan Avenue. It's a tremendous amount of meeting space. It's unlike the rest of the assets in our portfolio, but that's where I would call Marriott's sweet spot.

They do a very good job in that sort of big box experience. No different than the marquee next door, for example. I think that's where they're very good in sort of leaning into that. I think the reason why we would always say that it's just a choice at the end of the day is that I use the example of just because you went there for a conference doesn't mean I want to stay at a Marriott and at the end of the day, like I want something that's more authentic when I'm in those leisure destinations.

So that's why I say like for us, it's just a choice depending on what the asset is. And in a situation like our Chicago property, they do a very good job. I mean, I tell you that we've eclipsed where we were pre-pandemic, and we're one of the stronger performing group assets in that market.

And Jeff, I want to go back to something you said about the transaction market, both being interested in buying and selling and more lines out there. What markets or property types are you -- if you add your others, would you want to be seeing more of?

I mean if price is no object, I would buy independent resorts. I say price is no object because it's probably where the gap is widest. I mean some of the assets that we were talking about earlier today, they're sort of 5% and 6% cap rates. So think of that as almost 20x EBITDA. We trade at probably 8.5% to 9% cap right now.

So it's I guess I would say I'm speaking my book, but we probably have more leisure assets and resort assets than anybody, and yet we actually trade at one of the greatest discounts to our implied. And it's not a leverage question. We have one of the lower leverage balance sheets, too. So I think it's just how people bucket hotels and they kind of put the same multiple on everybody, they assume there's not much difference. But yes, I would say the independent side, it just gives us much more control.

And I think in your segment, like the CapEx investments are great because you're a really unique niche that you can monetize that. I think in lots of cities where the brands tend to mandate renovations every 7 years, the time clock doesn't always make sense, candidly. It's -- you could be the best performing asset in the market, you don't need to renovate.

But they're very time-based, and that's where it's just -- we tend to have a lot of friction with that view that you have to be reinvesting on a whether or not the asset needs it or whether or not it will benefit.

Are there operational flexibility that comes with that as well as you think about independence and that exposure?

For sure. I mean we can influence what staffing will be, and that really is beneficial with margins. To your point about when we look at our independent hotels that our margins tend to be much better.

One of the unique things about our portfolio, given the scale and the scale of the projects that we work on, we do most of that internally. We really drive timing of spend, how dollars are spent, both in terms of maintenance as well as enhancements. We have internal design and construction teams that manage -- we manage all our own room renovations, et cetera. So we're we've taken control of that part of the value creation.

And Mark, going back to the Opryland renovation or I should say, convention expansion, will that be something that we should then assume will build over time because of the long lead times of some of these groups?

Well, we start selling meeting space the day that we approve it and start construction. So sales teams have sales goals for that expanded space. They're selling off of renderings and doing site visits and walk-throughs during construction. And so in most cases, when we open incremental rooms or we open incremental meeting space, it really almost opens a lot.

That's great. Other topic du jour is around AI. Are you seeing any change in either customer behavior or even any thoughts that you have on the long-term impact from AI on either demand or margins?

It's whether it's AI or I'll just call it technology because I do think there will be some aspects. When I say like robotics, I don't mean like humanoids walking around, but whether it's something as simple as a robot.

I meet Adam Jonas, our informatics analyst. He will tell you all about humanoid robots coming.

Yes. I mean I do think that when you look across the industry that the opportunity is probably greatest for owners. I don't say that just because it's -- we're talking our book. I just feel like if you think about the owner, we have -- we're the beneficiary of the revenue and the expense savings. And I think when you think about lodging, it's one of the higher cost to operate segments of real estate. When you just think about the broader real estate sector, any office building out the window has like no employees in it. I mean employees of the office building itself, maybe no employees otherwise.

But maybe on the retail apartments, I think we have more inefficiency that can be solved. And I think on the revenue side, it's the same. I think that will ultimately be propelled by owners in some way, shape or form because a lot of the brands and our third-party managers, they're all paid off the top line. So I don't know what you've seen -- I haven't seen many brands expend a lot of money on trying to find ways to save owners' money. They tend to just think about driving top line.

So I think that the AI beneficiary, whether it's labor management or sort of complex jobs that -- accounting type jobs of the property that might get consolidated, I think those will accrue to the owner's benefit.

Yes. And look, for us, again, because of the lead time and selling rooms 8, 10 years in advance, we think that ultimately, there's a lot of opportunity for us in terms of pricing and yielding and how to think about how do you maximize revenue. It's a pretty complex yield management exercise for us because of the amount of inventory that we're selling at any given time. So being able to crunch big data and with a lot of variables, AI should be helpful.

So been a bit of a back and forth in terms of will AI reduce jobs, will it add jobs? Are you seeing any signs in your business, whether it's maybe leads that are coming from new AI start-ups or otherwise?

You mean in terms of our bookings coming through LLMs? Or do you mean like the employers themselves are.

Yes, employers themselves are -- or even if you just see any kind of change in corporate demand one way or another that could be associated to it?

I mean if you look at a market like San Francisco, where -- I mean, there's a variety of reasons why San Francisco is working. I mean it's fallen so far that it's effectively concerned. But I think there's a lot more enthusiasm in the San Francisco market around AI.

We have a property in Sausalito sort of under the Golden Gate Bridge that does a lot of midweek group for tech companies like the 50- to 100-person off-site. And you see a lot of the who's who of technology companies go there for meetings.

We haven't really seen it in our hotel business that much in terms of changing consumer behavior at this point. We're obviously experimenting with it in a variety of ways as it relates to pricing. And then in our entertainment business, we've started to deploy, particularly around things like dynamic pricing, how we market to concert goers and those types of opportunities. We've gone to a fully automated call center in our entertainment business now.

Since you're talking about the entertainment business, perhaps you can set the stage a little bit for folks that are less familiar or maybe more focused on the lodging side of the space. Just what are the various brands and platforms that you own and operate? And it sounded like in the last call, you were a little bit more excited about that business or positive about that business. So what are you seeing there?

Well, I mean, we've always been positive and excited about the business. For those of you who aren't familiar with the Opry Entertainment Group, it is a live entertainment business that's really focused on the country music consumer. We own a number of highly acclaimed brands, specifically the Grand Old Opry, the Ryman Auditorium, Austin City Limits Live in Austin, Texas. So -- and we have a number of verticals that all service that same customer. We're in the venues business. We are in the artist partnership business. We have a brand with Blake Shelton called Ole Red and another called Category 10 with Luke Combs.

And then we're in the festivals and amphitheater business as well as the content creation business. All of those verticals really focus on that singular customer, the country music fan. And it's a genre that's growing rapidly along with -- obviously, with Nashville as a tourism market, but also just as a city that's attracting a lot of high-quality employers.

And so that's a business that we've owned and operated forever. It was 100 years old last year. And we operate in a TRS. And it's about 15% of our revenue and 15% of our EBITDA.

For 100 years, how would you characterize the competitive moat of that business? And how does it -- maybe remind us of the interplay with the hotel side of the business? Are these totally run separate? Or are there still synergies within them?

Well, they are run separately with Marriott as our manager and us operating the entertainment business where we have opportunities to work together, primarily Opryland and the Grand Ole Opry because they're geographically next to each other. Those are all just arm's length commercial transactions. And these are -- it's an incredibly unique business.

And as I said, Country Music is growing very rapidly. And ultimately, our view of the business is that it shouldn't be in a TRS inside of a hotel REIT. And so as it continues to scale, ultimately, we'll separate that business in one form or fashion and let it stand on its own. But an incredible collection of brands in a really rapidly growing market.

Maybe you can elaborate on that a little bit since you talked about scaling it up. What does normalized margin for this business look like?

That business today runs in the kind of high 20s in terms of EBITDA margin. I think you'll -- over time, as it grows, depending on which of those verticals contributes to that growth over time, you'll continue to see that margin in kind of, I would say, in the mid-20s over time.

We've scaled the infrastructure of that business to the point now where when we're adding incremental units, we don't need to add incremental corporate capabilities. Obviously, it will be a step function over time. But as you think about the next -- we have a Category 10 right now under construction in Las Vegas.

We've announced one in Orlando, and we have a new Ole Red that we're doing with the Pacer organization in Indianapolis. We'll be able to bring those units online without driving a lot of incremental corporate costs. So we'll start to get some operating leverage.

We only got a couple of minutes left. I can go to some of my lightning round questions for everybody. But if anyone has a question in the audience, we can do that as well. We got one right here.

This is more of a general REIT question than hotel-specific perhaps. But we've seen REITs become a big part of the hotel industry, the casino gaming industry. I'm just wondering why it hasn't become a big part of the amusement park industry, the theme park industry. Are there any...

I don't know the amusement park business all that well. I think it's honestly like the capital investment in order to keep amusement parks interesting. What little I know of it, just from people I know who've been in the business, amusement parks sort of thrive on having like the hot new roller coaster or the hot new thing. And it's just the capital investment cycle is very intense.

Would you include water parks in there? Water parks are very low CapEx.

The other is that it's not -- compared to like the number of hotels in the country, there's not many of them.

Many of them, but we don't see REITs in any of them.

Yes.

Gaming, right, not so much amusement parks.

In terms of the questions that I had, these are -- we'll try to keep it tight here, but industry demand, a lot of back and forth. Do you generally think that as we look over the next couple of years, are you more constructive on the trajectory that we could be on, equally constructive or less constructive based on what you're seeing right now?

I mean, yes, we're certainly more constructive, particularly in our segment, where there's really no new supply coming online. Group demand is -- continues to grow. And so we think we're set up extremely well for the next couple of years.

I would say the same. I think when I look at our portfolio, while we're roughly in third in terms of our business mix between sort of leisure and business transient and group, you think about like the group fundamentals continue to look very good. We've eclipsed prior peaks on demand at sort of higher and higher rates. It's hard to see how that changes. We don't have the visibility that he does, just given the scale of their assets, they tend to have a much longer booking window, but I think the trends look good.

That really makes me enthusiastic and why I was saying independent resorts is that just demographically, you have sort of these 2 bumps within the portfolio -- within the population. One is sort of an aging consumer that is at peak earnings and peak spending. And so they're taking more trips that are longer and spending more on them. And at the same time, you have sort of a younger generation that's probably someone in their 30s that also value experiences over things.

And we, as an industry, haven't built resorts in the country 30 years. And it's not all beachfront. It can be -- we have stuff in Montana, I said Sedona, it can be ski related. But it's an industry that has no supply growth and demand is going to continue to outstrip, I think, inflation for the next few years on the leisure side.

Yes. Look, I think you have to be careful that you don't lump all hotel REITs into the same category, right? It's really -- the winners and losers are going to depend on the quality of the assets, the quality of the service that's delivered and what's your unique positioning? And are you servicing the consumer's needs or not?

Right. And then the last one, and we talked about artificial intelligence, but let's try to narrow it down to a single kind of thing that you think will have the biggest impact? Is it going to be more top line or reducing costs or other?

I think for us, top line will be where it will uniquely enhance our capabilities. I mean we're not there yet. But as I said earlier, having the ability to better yield manage over a long period of time, I think, can be very powerful for us.

I'm mixed on that just because we already operate pretty deeply in 3 channels when you think about it at most of our hotels. So I do think there's always opportunities to improve yield management as long as the increment sort of flows to the owner and ownership, I think, will be beneficial. But I think on the -- as I said, on the operations side, I mean, any given hotel in the United States probably has 7 to 10 software systems running, none of which talk to each other.

And when you sort of think of that as an example of how technology investment has happened in the hotel industry, historically, the brands didn't really focus on that. And so I think that that's where there's just a lot of inefficiency in the business where it's not about replacing headcount. It's like you can provide better service effectively with a little AI investment or technology investment. And maybe it lowers your cost structure, you can provide sort of for the same cost, a much higher level of service that I think that could benefit revenues as well, but I think it's going to be a mix for us.

It's great to get both of your perspectives. Please join me in thanking Jeff and Mark for all their thoughts today.

Thank you.

Thank you.

Welcome to the Ryman Hospitality Properties First Quarter 2026 Earnings Conference Call. Hosting the call today from Ryman Hospitality Properties are Mr. Colin Reed, Executive Chairman; Mr. Mark Fioravanti, President and Chief Executive Officer; Ms. Jennifer Hutchison, Chief Financial Officer; Mr. Patrick Chaffin, Chief Operating Officer; and Patrick Moore, Chief Executive Officer, Opry Entertainment Group. This call will be available for digital replay. Number is (800)7230607 with no conference ID required. [Operator Instructions] It is now my pleasure to turn the floor over to Ms. Jennifer Hutcheson. Ma'am, you may begin.

Good morning. Thank you for joining us today. This call may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements about the company's expected financial performance. Any statements we make today that are not statements of historical fact may be deemed to be forward-looking statements. Words such as believes or expects are intended to identify these statements, which may be affected by many factors, including those listed in the company's SEC filings and in today's release. The company's actual results may differ materially from the results we discuss project today. We will not update any forward-looking statements, whether as a result of new information, future events or any other reason. We will also discuss non-GAAP financial measures today. We reconcile each non-GAAP measure to the most comparable GAAP measure in exhibit to today's release.

I'll now turn the call over to Colin.

Thanks, Jen. Good morning, everyone, and thank you for joining us today. We delivered a strong start to the year with results that exceeded our expectations despite the complex geopolitical backdrop. Our first quarter performance reinforces what we've long believed about this company. The quality of our assets, the durability of our business model and the way we allocate capital delivers superior outcomes for our customers an attractive, sustainable returns for our shareholders.

In our same-store hospitality business, we grew revenue and market share and expanded margin on slightly fewer room nights, a clear demonstration of pricing discipline, mix management towards higher-value customers and enhanced monetization of on-site demand. Results were particularly strong for the assets that we have -- that have recently benefited from the capital investments. Gaylord Opryland delivered record first quarter revenue and adjusted EBITDA Gaylord Rockies delivered record first quarter revenue, and Gaylord Palms delivered record revenue and adjusted EBITDAre of any quarter in its history.

The JW Marriott Desert Ridge also delivered strong first quarter results, which given the seasonality of that market, is especially meaningful for the full year profitability. Though we've owned this hotel for less than a year, the benefits of our ownership are already evident. Our growth-focused yield strategy resulted in meaningfully higher group volumes, which supported strong outside of the room spending and margin outcomes. Together, this property in the JW Hill Country, which is now undergoing the capital investment that we identified at the acquisition we had a tangible runway for growth over the medium term, and I couldn't be more excited about their role in our future.

On the entertainment side, demand for live entertainment remains incredibly healthy. Our Allred brand continues to resonate in a meaningful way, particularly in markets like Nashville and Las Vegas and soon, we believe Indianapolis. Indianapolis has long been on our radar as a vibrant convention and leisure market with strong economic and demographic drivers and a deep base of country music fans. To that end, we were excited to announce just this week a development partnership with the organization behind the NBA paces and the WNBA fever. This red development will contribute to the broader revitalization of the downtown corridor between the convention center and the paces arena.

This announcement marks our third development update this year, and our team remains active in evaluating both organic and inorganic growth opportunities toward expanding our platform and enhancing the value proposition for artists and consumers alike. Looking ahead, the future looks very bright for both of our businesses. Over the last 2 years, we've meaningfully improved the growth profile and pipeline for each while continuing to build customer satisfaction and loyalty through consistent execution and focused capital investment. We remain on track to achieve the 2027 financial targets we set in early 2024, and we look forward to updating you on our continued progress.

Now -- before I hand over to Mark, let me go off script and say just a couple of things about our team. Our asset management team, led by Patrick Chaand I believe, is the best in the industry. And our team at OEG, led by Patrick Moore, is firing on all cylinders. Mark, Jen, and Scott and their teams are showing tremendous leadership and our company couldn't be in better hands. So Mark, what have you got to tell us?

Thanks, Colin, and good morning, everyone. I'll provide more color on our operating performance and business momentum before discussing our updated outlook. From an expectation standpoint, we entered the quarter assuming relatively flattish revenue and some margin pressure in our same-store hospitality business, along with softer profitability trends in entertainment, due in part to mix-driven seasonality and a challenging year-over-year comparison. Entertainment performance finished in line with our expectations, while the hospitality business delivered meaningful outperformance.

Same-store ADR increased just over 5% year-over-year, more than offsetting lower group occupancy. As you'll recall, the timing of Easter last year resulted in unusually strong group demand in the first quarter, creating a challenging year-over-year comp. High-quality corporate group demand proved far more resilient than lower contribution segments, resulting in higher ADR and higher levels of outside-the-room spending compared to both our expectations and last year. Banquet Navy revenue contribution per group room night increased more than 6% year-over-year with gains at nearly every property in the portfolio. Our leisure business, while a smaller contributor to the first quarter results also surprised to the upside.

Both demand and rate increase compared to last year supported by seasonal spring break travel with particular strength of the JW Marriott Hill Country and Gaylord Rockies. Higher flow-through from growth in room rate and catering business together with ongoing efficiency initiatives drove adjusted EBITDA margin expansion in the quarter. Looking forward, leading indicators of group demand remained resilient. The elevated attrition and cancellation activity we experienced last year has largely normalized. Excluding January, which was impacted by winter storm firm, attrition improved year-over-year and cancellations for the year were essentially flat.

On the heels of record monthly production in December, group bookings activity continued at very strong levels in the first quarter. Growth group room nights booked in the first quarter for all periods increased nearly 27% year-over-year representing the strongest first quarter reduction since 2018. Reflecting our continued focus on premium corporate groups, corporate bookings comprised approximately 2/3 of production. Association bookings were also strong surpassing pre-COVID first quarter levels for the first time, setting aside pandemic-related rebooking activity.

As a result, growth in same-store group rooms revenue on the books for all future periods compared to the same time last year, accelerated sequentially from 6.5% as of December 31 to 7.6% as of March 31. Across the portfolio, and most notably at Gaylord Opryland, we've invested in food and beverage offerings and carpeted meeting space to attract and serve the premium Corporate Group segment. In support of our capital deployment strategy, and the increase in corporate demand for our hotels, we've refined our inventory management approach to make more sellable inventory available through the entire 24-month corporate booking window.

Enhancing the corporate mix of our hotels drives higher room rates, outside the room spending and profitability. However, these changes in our inventory management approach create challenging year-over-year comparisons as we move into the prime corporate booking window for 2027 and 2028. For 2027, same-store group rooms revenue on the books is up over 3% compared to the same time last year and down 1% for 2028. Importantly, ADR growth for both periods is pacing up mid-single digits and corporate meeting planner feedback and lead volumes are strong. Given this interest, we're confident that we are well positioned to achieve the booking goals required to enter 2027 and 2028 with our targeted 50 points of occupancy on the books and strong rate growth.

Now I'll turn to JW Marriott Desert Ridge, which also delivered a terrific first quarter. Prior to our ownership, the property prioritized higher-rated leisure demand during the peak first quarter period. Under our group first sales and revenue management strategy, group mix increased by nearly 200 basis points and group demand grew more than 9% while maintaining ADR discipline. In fact, total ADR for the property increased nearly 8% year-over-year with growth across the group and leisure segments and bank went and AV revenue, up 25%. We expect these trends to build over the next several years as the property grows its share of the meetings market under our group strategy.

Supporting this strategy, we completed the 5,000 square foot meeting space conversion in April which we believe will further enhance the hotel's ability to attract high-quality corporate groups. Turning to entertainment. First quarter results declined year-over-year due to a challenging comparison seasonality associated with our new business line and the impact of winter storm firm. Overall, business performance was in line with our expectations, and we continue to be encouraged by the underlying trends. Both old red and category exceeded our expectations with particular strength in Nashville in Las Vegas in the back half of the quarter.

March represented a new high watermark for Old red Las Vegas with the venue generating the highest multi-revenue and adjusted EBITDAre in its operating history. Finally, I want to spend a few minutes on our outlook. As we noted in the press release, we are raising the midpoints of our guidance ranges to reflect the first quarter hospitality outperformance. Our outlook for the rest of the year is essentially unchanged from our prior expectations, reflecting measured confidence in our business. We continue to feel good about the areas of the business within our control, sales production, pricing discipline, margin initiatives and execution of the capital projects we have underway.

And so far, meeting planner sentiment and the leisure guest willingness to visit our properties has remained resilient. What gets us to the high end of the range is continued strong near-term group business trends including normalized levels of attrition and cancellations, healthy in the healthy in the year for the year production and strong on-property spending as well as continued momentum in leisure. The low end of the range assumes some hesitation in near-term meeting plan or decision-making, a potential pullback in 2026 meeting budgets and softer leisure demand, potentially in response to higher gas prices.

At the midpoint for the rest of the year, we continue to assume mid-single-digit growth in group rooms revenue and flattish year-over-year leisure performance. Let me make a few comments on seasonality for the same-store hospitality business, we continue to expect the third quarter to show the strongest revenue and margin growth for the year, reflecting strong corporate group mix on the books and easier year-over-year comparisons followed by the second quarter. We expect same-store RevPAR growth to accelerate as the year progresses, especially as the Gaylord Texan room renovation is completed in August.

For JW Marriott Desert Ridge, we expect the second quarter to contribute slightly more than 25% of full year adjusted EBITDAre. And for the entertainment business, we continue to expect the second and fourth quarters to be the largest contributor to full year adjusted EBITDAre. Looking beyond 2026, we remain confident in the '27 adjusted EBITDA targets we outlined at our last Investor Day. Our forward book of business the addition of the JW Marriott Desert Ridge and the capital investments underway across the portfolio position us well to deliver those objectives.

And with that, I'll turn it over to Jennifer to walk you through the balance sheet and capital allocation.

Thanks, Mark. We ended the first quarter with $424 million of unrestricted cash on hand. In addition, we held $27 million of restricted cash available for FF&E and other maintenance projects. Both our corporate and OEG revolving credit facilities were undrawn resulting in total available liquidity of approximately $1.35 billion. At the end of the quarter, our pro forma net leverage ratio based on total consolidated net debt to adjusted EBITDAre assuming a full year contribution of adjusted EBITDAre from JW Marriott Desert Ridge was 4.3x. In March, we completed an opportunistic refinancing, issuing $700 million of senior unsecured notes due 2034. And together with cash on hand, redeeming in full the prior 2027 notes.

The transaction was well received and priced through our expectations, extending our weighted average maturity and eliminating near-term refinancing risk through the first half of 2028. With respect to capital expenditures, our full year outlook is unchanged, and we continue to expect total capital spending for the year in the range of $350 million to $450 million. In April, we completed the foundry field house ports bar development at Opryland. And as Mark mentioned, the meeting space conversion at JW Marriott Desert rich. Also in April, we kicked off the JW Marriott Hill Country rooms renovation which is expected to run through the first quarter of 2027.

The Gaylord Opryland meeting space expansion, the Gaylord Tech and Ridge renovation and Category 1 Las Vegas development remain underway. All major projects remain on time and on budget. Finally, regarding our dividend, it remains our intention to distribute 100% of our retaxable income through dividends over time. With that, let's open it up for questions.

[Operator Instructions] And our first question today comes from Patrick Scholes with Truist.

Question for you on your Dallas property in the World Cup. It looks like it's about a half an hour away. Are you expecting to get much business from the World Cup on that? And if so, has it been trending? There's a lot of media about FIFA cancellations? Did you have any of those FIFA bookings? And any color in that regard.

The World Cup is going to be marginally impactful to our Dallas property. We already had a substantial level of group room nights on the books, and we're in a really strong position, but it will help us on trend at rate. So we will see a little bit of lift there. Overall, World Cup, I think, has been a mixed bag in certain markets, but Dallas is seeing a positive impact, and we should see some on ADR as well.

The fan base though in Dallas, Patrick, is going to be pretty aggressive with the England team being playing in Dallas.

Duly noted.

Our next question comes from Dan Politzer with JPMorgan.

I just wanted to go back in terms of how you're thinking about the guidance, right? It sounds like there's a little bit of not caution, but maybe conservatism is a better word in terms of how you're thinking about the leader trends. And I know you mentioned fuel prices. Have you seen anything yet? Or what are you kind of baking in there in terms of how you're kind of thinking about the puts and takes specifically on -- as you enter 3Q with leisure travel kind of having a bigger part of the mix?

There's no point of caution that are embedded in our full year guidance. Our outlook for the remainder of the year, Dan, is unchanged from what we had at the beginning of the year. We're raising our full year guidance in recognition of the strong trends we had in the first quarter. And as we noted throughout the prepared remarks, all the leading indicators are continuing to remain very resilient. You saw attrition, for example, improved year-over-year when you look at the February and March trends. You see bookings continue to trend upwards on the group side meaningfully. So -- and outside the room spending is good leisure performance in -- from spring break was exceeding our expectations. So there are a lot of good reasons for optimism. And I think our approach to full year guidance at this point is measured confidence.

Having said all of that though, I'm sure Dan, you probably read the 2 of the 4 dissenting Fed governors this morning put out statements saying that we live in extremely volatile times. There could be rate hikes going into the future, simply because what is going on in Iran with oil prices could affect unemployment could affect inflation. And so here we sit, we've got a wonderful business on our hands, firing on all cylinders -- but there are some stone clouds in the horizon that we have to be cognizant of that. So there is a degree of caution in this. But as Jen said, our businesses are performing admirably. .

And our next question comes from Smedes Rose with Citi.

Mark, you alluded to this in your opening remarks, but I did want to ask a little bit about the cancellation and attrition rates that you saw during the quarter that it did look elevated, at least what you've reported over the past several quarters. And are you saying it was really all due to that terrible storm in January? Or just kind of wondering if you could unpack that a little bit of what you guys are seeing.

Yes. I mean essentially, if you look at the first quarter by month and you back out what occurred in January during the winter storm Fern, attrition was actually lower for the remaining few months year-over-year. And cancellations, we said in the script was essentially flat. I think it was about 200 room night difference. So it was essentially flat. So the trends we're seeing with the trends we've seen thus far in April would continue to support that .

Our next question comes from Aryeh Klein with BMO Capital Markets.

On the future group pace in '27 and '28, you mentioned some of the inventory management changes that are maybe having impact on comps. Hoping you could just provide a little bit more color there how maybe we should expect things to trend from here?

Sure. I'll start and then I can jump in. What you're seeing in those '27 and '28 numbers is really kind of the manifestation of the strategy that we've implemented over the last really the last couple of years as it relates to refining our group strategy to maximize the performance of the hotel and what that really is doing is making inventory available for premium corporate groups. If you think about what we've talked about really starting several years ago with we undertook primary research to really understand what those customer needs were for those premium corporate groups.

We're now in the process of deploying capital into the various hotels to provide the food and beverage and meeting space as I called out in the script or in particular, and we're now modifying pricing and inventory management and what -- really what we're -- what we're doing there is making sure that we have the right rate states and space available when that premium business is ready to transact, which, as you know, the corporate window is significantly shorter than the association and SMERF, it's about 2 to 2.5 years.

And so as we've looked at how we manage that inventory, we've held more inventory available, and that's what you see reflected in those year-over-year growth numbers. And then the last piece of this is that we worked with Marriott to modify our sales incentives to ensure that the sales teams are focused on the right segments that we're trying to sell to and that they have the appropriate short- and long-term goals to ensure that we hit these crossover these crossover goals that we have for future years. And so what you're seeing in those numbers is really the culmination of the strategy to push more corporate business higher-end corporate business into our hotels.

And in terms of how we get from where we are today to that 50 points and what gives us confidence we can get there, it's really around a number of different points, I would say. One is that we have the best physical product that we've ever had to serve the corporate customer as it relates to our portfolio, and it's getting better each and every year. current corporate demand trends are very positive. Leads are -- our corporate leads are the highest they've ever been. They're about 27% above where we were in 2019. Pattern availability is good. As I said, we've been holding inventory. And when we look at the data, the shift is already happening. If you look at rest of the year '26, we're up about 3 points in terms of corporate mix. For '27, we're up right now about 3 points year-over-year. And in '28, we're up about 6 points. So we feel like we're in really good shape, and we have the pieces in place to execute this strategy.

Our next question comes from Rich Hightower with Barclays.

I guess maybe just a follow-up on the corporate booking question. Obviously, trends have been very, very strong. And I'm wondering if that is surprising at all in the context of some of the macro headwinds that have already been referred to. And the jobs market is choppy. We're reading about layoffs in different pockets of the economy. So does that surprise you? Or is it sort of a fundamentally different composition of the customer base that would be staying in your properties?

Rich, this is Colin. Let me kick this off a little bit. what you're saying about the jobs market. There's a question about how much of the jobs market is being affected by being tremendous amount of capital that's flowing into artificial intelligence. But when you look at the underlying strength of what is going on in corporate America today, when you look at where the markets are trading, this morning, the S&P, again, is at all-time highs. And the reason for this is corporate profits are in really good shape. Look at what's going on in the banking industry, you look at what's going on in our industry, it's in really good shape.

And so the strategy that Mark just talked about in answer to Arlay's question, -- when Patrick came and sat down with Mark and me some months ago and talked about becoming a little bit more aggressive on cutting these blocks out in '28. It made a hell of a lot of sense to us simply because of the underlying strength of what we're seeing in volumes having more inventory to book into in these periods ahead of us at higher-rated business makes a ton of sense -- and so I think our economy -- we've got this unfortunate noise of what is going on in the Middle East -- but putting that aside, our economy is in pretty good shape. And we're back for the rest of this year and next year, it's going to remain that way.

Yes. And this is Patrick. Mark and Colin have both done a great job of outlining how we feel about the bookings and the trends we be there. And I would just add to this. But if you just look at on-property actualization of groups, we saw some hesitation back in Q3 and even into October and November. But as we entered December, we started to see that hesitation to spend abate. And that has continued as we moved through the first quarter. I would tell you that as we went into the first quarter, we were hesitant, but meeting planners have shown up in a major way and spent very well on property, and that seems to be continuing. So we are growing in our confidence that the groups that are traveling to our hotels are in a mindset of feeling comfortable enough to proceed with their programs at the levels that they originally anticipated. .

Our next question comes from Cooper Clark with Wells Fargo.

On OEG, it seems like every quarter now, we're talking about a new development or operating contract for the business. I'm just curious how you're thinking about EBITDA growth of that business over the next couple of years? And when you'll consider making some of the additions to management structure that you discussed as being prerequisites for a potential spend? .

Sure. So in terms of growth, we have perhaps the most robust pipeline of confirmed growth that we've ever had as a business. And we've continued to make some additions from an organizational standpoint in terms of talent and capabilities, including a new COO and a new CMO in the last sort of 18 months. And we've added some great expertise in festivals and amphitheaters and for the artist partnerships, we've added some strength and talent and capability there as well. We'll continue to look at expansion in capacity and capability from an organizational standpoint. And we're also working in terms of technology and adding to our tech stack overall for the entertainment business. So really excited about what the future holds over the next 2 or 3 years. .

And we put dedicated design and construction folks within the business to deal with this volume of growth. It's exciting stuff.

Our next question comes from David Katz with Jefferies.

And all the impression so far. I wanted to just talk about Marriott Desert Ridge. I know you talked about it a little bit. But I noticed in the guide you're sort of pushing those numbers just slightly higher for this year. Does that change your long-term underwriting view on it? Is that how we should take this. And I know there have been some discussion about some capital going in there and update and some perspective there would help. Thank you.

No. I think we were very pleased with the outperformance from Desert Ridge in the first quarter. We outlined our group forward strategy relative to the prior more leisure-focused strategy. We talked about the fact that spring break there outperformed our expectations, and we're happy to be able to flow that through. I think our expectation for the remainder of the year for Desert Ridge again compared to what we thought when we said our initial guidance is a little unchanged. It's a little bit of flowing through what we saw in terms of good performance during the first quarter.

That's nothing that needs that, that first quarter is over 40% of the annual contribution for that property, annual profitability. I would also say we acquired this property 3 quarters ago now, we had talked about being able to buy down that multiple what our expectations at that point were for our first full year of ownership. And we're right on track, I think, with those financial expectations in terms of the longer-term outlook, I know as a management team, continue to be very confident about that. And Patrick, you may want to weigh more on that.

Yes. I mean we're in our first year owning and operating this hotel. And we are developing and further refining what we want to do from a capital perspective. We don't see a massive need for capital. This hotel was in great at. And so it's just about continuing to tweak and meet the needs of the meeting planner. We talked about we've converted some space into usable meeting space, and that's been received very, very well already. So we'll continue to weak and refine what we're going to do there long term, but it's not going to be a massive strain or suck on our capital needs.

Our next question comes from Duane Pfennigwerth with Evercore ISI.

Just wanted to come back to the strong bookings growth for the first quarter. How much of that would you say was higher conversion of existing leads effectively planners getting off of the sidelines versus easy comps last year. And then maybe for my follow-up, could you speak to the underlying drivers of outperformance in Nashville?

Yes, a couple of comments I would make. Number one, our first quarter is coming off of an extremely strong December, the strongest December that we've ever seen in terms of production. So the fact that we're seeing that continue through the first quarter and even into April, is a strong indicator that group is on an upward trajectory. We are really focused on acquisition business. It's probably about 30% of what we book into the hotels in any given quarter. So we're bringing in a lot of new business as well as the strong multiyear rotational business. So a little bit easier comp, but that comp is really easier when you compare it to second quarter of last year when the tariff announcements and everything like that have really started to materialize in cancellations. So I would say there's not necessarily an easy comp, just continued growth, both on the acquisition front as well as strengthening group dynamics.

Our next question comes from Jay Kornreich with Cantor Fitzgerald.

You put a clear focus on investing and improving the portfolio with many ongoing CapEx opportunities. So I just wanted to ask about incremental portfolio CapEx opportunities you can do. You previously discussed potential for adding rooms at the Gaylord Rockies, I think the JW Hill Country as well. So I just want to see if there's an update on timing for any of these even similar projects.

Yes. You already hit it right on the head. We are definitely interested in expanding Gaylord Rockies and we're working through some opportunities at the local level there before we can proceed with that. but are excited to be able to add to that property at some point in the near future. Hill Country is definitely something we're studying and looking at and working to continue to refine that property, but there's definitely an expansion opportunity there. And then I would tell you that we're continuing to look at Gaylord expansion opportunity. Beyond that, we have multiple opportunities to make marginal tweaks, whether it's repositioning food and beverage. -- or adding a little bit of space here and there, but we have a target-rich environment for additional expansion and investment opportunities across the portfolio.

Our next question comes from Stephen Grambling with Morgan Stanley.

I think you talked to confidence in hitting the 2027 targets you had laid out in 2024, as we're about the midpoint here and look back at some of the drivers of that outlook, what are some of the biggest surprises, both maybe positive and negative to consider in each segment? And any reason to believe that those growth rates have evolved relative to the one you actually had outlined them.

Relative to our -- the assumptions that we made when we put that together in 2024, probably the biggest difference between our performance and what we planned is really the acquisition of Desert Ridge and the expansion of the Rockies, while still working through that expansion. And I think we're getting very close to actualizing it. We had assumed that it would be completed prior to 2027. It was in that 2027 number. I think that as we look at -- as we look at how our same-store business has performed, it's performed frankly admirably relative to our expectations, particularly as you look at how the corporate customer has responded to the activities and the capital that we've deployed that we talked about a little bit earlier. You see the rate growth that we've actualized as well as the rate growth that's on the books and the level of bookings that we're achieving, it really all flows back to that focus on that corporate customer. And frankly, I think it surprised us a little bit to the upside.

Entertainment, Mark, is tracking pretty much as we thought back in...

Yes. And I think entertainment actually we have more growth in the pipeline than I think we've laid out. .

Our next question comes from Michael Herring with Green Street.

With the change in your group booking strategy, can you quantify the target mix shift in terms of corporate group relative to association and SMERF relative to historic levels? And then how are you thinking about the risk profile of your forward bookings from targeting more of these corporate groups given the shorter booking windows that you mentioned earlier?

Yes. I think it's important to -- for everyone to realize that what we're talking about is we're talking about a few points of occupancy here. We're refining and turning the dial where we might settle in where we're 3, 4, 5 points higher in terms of corporate versus association and SMERF and it's really about raising the level of customer, not only in the corporate business, but also in SMERF and association. All groups are not created equal. And so it's really about moving up the rate scale and driving premium customers across all 3 of those. So this is not I don't think it's going to create a significant amount of incremental volatility, right? In our performance. The other thing I would say is that these are contracted room nights. And if you look back historically to say the '09 recession, where we had a high level of cancellations, we also had a high level of collection fees. -- which obviously helps mitigate the lost profitability. So we feel very comfortable in making this shift and driving yield and not materially changing the volatility of our earnings.

And just to accentuate your point, collections of cancellation fees on corporate are usually easier to collect than they are with association and SMERF because it doesn't create a financial risk or danger for the overall organization, corporate pays pretty quickly and with very little negotiation.

Do we have any more folks in the queue? Or is that it? .

We have no additional questions at this time.

Okay. Well, we will thank everyone for the participation this morning and upward and onward. Thank you very much. And Angela, thank you. .

This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Welcome to Citi's 2026 Global Property CEO Conference. I'm Nick Joseph here with Smedes Rose with Citi Research. We're pleased to have with us Ryman Hospitality Properties. This session is for Citi clients only and disclosures have been made available at the corporate access desk. To ask a question, you can raise your hand or go to liveqa.com and enter code GPC26 to submit any questions.

Mark, we'll turn it over to you to introduce the company and team, provide any opening remarks, tell the audience the top reasons that investors should buy your stock today, and then we'll get into Q&A.

Thanks. Good morning, everyone. Thanks for having us today. Joining me today is Jennifer Hutcheson, our Chief Financial Officer; and Sarah Martin, who runs our IR operations. For those of you who aren't familiar with Ryman Hospitality, we are a group-focused high barrier to entry lodging REIT, and we're built around a unique portfolio of large, irreplaceable group-oriented assets.

We also own a rapidly growing entertainment business that owns some of the most iconic brands and venues in the country music space. I think what makes us unique is that our hotels are large. They're all under one roof, destinations for groups and leisure customers.

And that focus on group, about 70% of our business being the group segment, it gives us strong visibility into the future business because of the long booking windows associated with groups. And it also gives us a level of stability because those groups are under contract. And when they either attrite or cancel, we collect fees. So in significant downturns or economic -- difficult economic times, our profitability is bolstered by that fee collection.

We also have a growth profile that our peers don't have through capital allocation. These large assets, this platform that we operate as really a single business allows us to deploy capital at high returns to do enhancements and expansions of these existing assets, which -- when you leverage that infrastructure, you get very high returns on invested capital.

And you also reduce the risk because we have so much information as a result -- as it relates to what our guests are looking for and what that property needs to continue to drive profitability.

Lastly, we outlined a multiyear growth strategy in 2024 that we're executing. That execution continues. And we have the balance sheet to continue to deploy capital into these businesses. We have moderate leverage at 4.3x, we've got strong liquidity. We have over $1.4 billion of liquidity, and we have no maturities until 2028. So company is in really good shape.

We've carried some strong momentum into 2026 coming off the fourth quarter with -- in terms of business on the books, lead volumes, what we're seeing in terms of meeting planner sentiment. So we're very, very optimistic about how we'll perform in 2026.

In terms of three reasons that you should own the stock, first and foremost, we are a highly differentiated model within -- in the REIT space. We're the only ones focused on the group segment. And you benefit in terms of stability and visibility because of that. We have a very clear and effective capital allocation strategy that delivers and has delivered durable and accretive growth. And we have a long tenured management team that has a clear track record of creating shareholder value. The majority of our management team has been with us for anywhere from 18 to 23 years. It's the team that built and operated these hotels prior to converting to a REIT in 2013.

And since that time, in 2013, whether it's total shareholder return, whether it's AFFO per share growth or whether it's dividend per share growth, we've delivered the highest growth rates of our peer set and in most periods in cases above the REIT index generally.

So best-in-class assets with durable and accretive growth and then a consistent track record of value creation, I would say, are the three reasons why you should own the stock.

Okay. Great. Thanks. I wanted to start out with maybe talking a little bit about -- I mean, you obviously like, in line with everyone else, you recently reported fourth quarter and your outlook for the year. So your RevPAR guidance is 1.5% to 3.5%, essentially in line with what we saw from most of the lodging REITs, low single digits.

And I guess, I wanted to ask you first, just given the visibility that you have, and I think you said 50% of the occupancy points are on the books. So there are certain higher rate. It seems like to get to the low end of that range, you would have to see negative RevPAR through the balance of the year, but correct me if I'm wrong and just kind of maybe talk about getting to the low end and the high end of that range.

Yes. So we're entering the year with about 50 points of occupancy on the books. Group rooms revenue on the books is about 6% ahead of where we were entering 2025. So very well positioned for the year.

The real issue for us is that we seem to be living in a very volatile world. And so, as we talked about on our earnings call, what we try to reflect in our guidance is just some of the uncertainty associated with the environment that we're in. When we look at our internal metrics, the things that we look at as it relates to group and how group may or may not perform. We don't -- our dashboard right now is all green. It's not showing -- it's not flashing yellow or red anywhere in terms of business on the books, lead volumes, what we're seeing in terms of outside-the-room spending, attrition and cancellation rates. All those factors are positive.

What we're trying to factor in is, a little bit of what we saw last year when we had Liberation Day in April, which really took some of the momentum out of the market. We saw some meeting planners pull back and then we recovered in the fourth quarter and saw a very good performance and had an overall good year.

But frankly, I think that the guidance that we provided just tries to reflect that uncertainty in a range of outcomes that...

So it sounds like from what you're saying 1.5% would be disappointing relative to what you're seeing now and your expectations and what's on the books. But I mean, no one's faulting you for having conservatism. It just seems like 1.5% would be hard to get to given what you know so far.

I think based on the controllables and what we know so far, we would not anticipate that. But the range that we provided is our guidance, and we'll update that when we get later in the year and as the year unfolds and we see how some of the things that are occurring in the environment, how it shakes out. But to your point, there's no real benefit to being Herculean in your guidance in February, frankly.

No, absolutely not. I just feel like a big point, a selling point at Ryman is that, you have better visibility relative to peers. So when you come out with a RevPAR outlook that's in line with peers, I just sort of wanted to explore it a little bit more. But I mean, everything you're saying makes sense.

We have a question?

We do have a question that's come into LiveQA. How are you finding the progress of the multiyear growth strategy compared to your expectations thus far?

Generally, we're on track in terms of timing, in terms of budgets. In terms of those projects that are up and running. Results have been consistent with or better than what our expectations were. I would say that the one -- if you look back at what we laid out in 2024, the one, I think, significant project that we are -- that we had anticipated being underway at this point that's not is an expansion of the Gaylord Rockies. We're working with local government there on a number of initiatives prior to starting that project.

And as we said on the call, we anticipate that, that process will draw to a close fairly quickly, and that we'll begin that project at some point here in the near future.

So when you look at the update that you gave -- or the outlook that you provided, I think the range was $900 million of EBITDA at the low end and $1 billion at the high end. And I think that included the Rockies rooms or rooms expansion being in there. So what would you say adjusted that range should be if people were going to kind of maybe look at that now? And I think that was obviously before you bought the JW Desert Ridge as well.

Yes. It kind of depends on -- it depends on kind of what's in and what's out. To your point, we had anticipated we would have that.

Let's put the Desert Ridge aside because you've already said what the EBITDA is going to be there. So just taking out the rooms, what do you think that $900 million to $1 billion should be adjusted to?

I think that without Desert Ridge, we will be comfortably in the lower half of that range. I think if you include Desert Ridge, you're now in the upper half of that range, is the way that I would characterize it.

Okay. And then on the Rockies, I mean, when you built that, you talked a lot about getting some, I think, sort of, I guess, you call it tax incentive financing. Just kind of remind us what your agreement with the local authorities is? And is that kind of what's holding up your rooms expansion there?

So, our current incentive package is on the original 85 acres where the hotel is developed. We also own 130 acres of undeveloped land around it. But on that 85 acres, we collect the majority of our real estate taxes, occupancy taxes in a portion of the sales taxes. And depending on the tax stream, that incentive was anywhere from about 25 to 30 years. So it's a meaningful incentive package.

The issue that we're wrestling with right now is around property tax valuations in where those valuations are in that local jurisdiction. And so we've been working on that issue. So hopefully, we'll have that resolved fairly quickly and be able to move forward with the project.

And what sort of the capital allocation roughly to build rooms at Rockies?

So this expansion will be 450 rooms and an indoor expanded water amenity similar to SoundWaves and Nashville. The cost for the rooms expansion and the water park would be about $300 million. You'll recall, Smedes, that we did a significant amount of work on this property over the last 2 years to enhance and expand the food and beverage offerings there in the seat count. So from a meeting space and seat count perspective, we have the infrastructure to support that room's addition. So the leverage that we'll get from that room count should be quite good in terms of operating leverage.

Okay. And then just kind of what target -- what kind of returns would you target on that $300 million roughly?

Mid-teens unlevered.

Okay. One of the things I wanted to ask you about I know you're over 70% group. But I think some years ago, you tried to improve your leisure kind of amenities and target that audience a little more. I sort of -- how is that going in terms of the segmentation to leisure? And then maybe you could just touch on, you had a much better 4Q '25 holiday programming season relative to the prior year. Any kind of lessons learned there in terms of bringing folks in? Because obviously, it was quite successful this year.

Yes, holiday period was quite good in the fourth quarter of this year, really off of what was a little bit of a disappointing '24. We made some changes based on the consumer research that we did post the '24 holiday season and really made some changes to the timing of our marketing, how we packaged -- how we package the offerings and then how we price the offerings, which drove some earlier bookings, which allowed us to build some compression. And ultimately, as you mentioned, we served a record 1.5 million customers through that ticketed event ICE!.

In terms of the focus on leisure and investment, that's -- that focus really has been across our business. We did some work pre-COVID that we called internally this notion of enhancing the project, our portfolio overall with the idea of growing our average rate, attracting higher quality not only group customers but leisure customers. And that's a big part of our whole strategy around the capital deployment, whether it's in carpeted breakout space, whether it's in food and beverage or other amenities like pool product. It's to drive value and so ultimately, to drive rate.

And if you look at how our business has performed over the last 4 or 5 years, we've seen a very strong growth in our average rate. We're attracting more premium groups and more premium leisure guests.

So, the segmentation is not changing that much. It's just charging more for the 30% or so, that's leisure.

Right. We're still 70% -- about 70-30 in terms of group leisure. But we have been able to increase our rates because we're delivering greater value to the customer.

Okay. Okay. I mean, we had a question come in that was touched on leisure, but I guess the part that I didn't ask is, has adding the JWs and the water parks change the terminal mix going forward. I'm not sure what the terminal mix is, but...

I assume you're talking about the mix of group leisure.

Yes. I guess. I mean, having the two JWs in the portfolio has set up your leisure segmentation at all.

I mean, marginally, because they're about 60% group as opposed to 70%. So -- but relative to the size of the portfolio, it won't move the weighted average significantly.

And just in terms of your footprint, I mean, I felt like -- and maybe I overinterpreted this. But it's sort of -- it seemed like you alluded on the call of maybe potentially adding another JW Marriott to the mix over time, because you have the sort of subset of like higher-end groups. JW is a higher-end hotel relative to a Gaylord. Could you just talk about that? Do you feel like you need to...

Yes, I mean, I don't know that we need to. I think it's desirable over time to continue to grow distribution if we're -- if we're finding the right asset for the portfolio that's consistent with our strategy, and we can acquire that at a price that makes sense for our shareholders. Certainly, we would look at that. You won't see us go out and push into other segments or different product types.

We've been -- we have been, and we'll continue to be very focused on that large group customer. And preferably, for it to be a Marriott-managed product so that we can integrate it into the portfolio and try to capture some of the synergies that come both operationally as well as from a consumer perspective with the rotation of groups.

Okay. Question came in. The question is, does the 2026 RevPAR guide include renovation headwinds? If so, could you please quantify the impact?

It does. And it's essentially consistent with what we had in 2025. I don't know if you have any other comments you want to make as it relates to that in guidance?

No, I think that's exactly right, and that's why we were not explicit necessarily in the guidance that was in the release was because it was comparable to 2025. So not a meaningful call out from a year-over-year change standpoint.

Okay. I wanted to ask you, I mean, I don't think there's a lot of competition or new competition in this space. Not a lot of people are building hotel -- big hotels. But the Chula Vista, Gaylord did open. And then in the Glendale area. So Phoenix, there is the -- I'm not sure if I'm pronouncing it right, but it's VAI or V-A-I, large hotel. I don't think it's directly competitive for you, but it is a large property. Could you just talk a little bit about what, if anything, you've seen from the Chula Vista, Gaylord and from the new asset in Phoenix?

Sure. I think, broadly speaking, having an additional unit of another Gaylord with -- to add to what's currently a fairly limited distribution of the Gaylord Hotels brand is additive. So when we saw that open last year, we were excited to be able to attract and have a location that's more Westward that could be more accessible to folks who are west of our most western location, the Gaylord Rockies.

And so the thought there is groups, people who had not previously been aware of the Gaylord Hotels brand could experience the Gaylord Pacific in the California location come in at arguably a higher ADR given that market and then rotate into our hotels. So we're supportive in general.

There are, of course, brand standards that we support to make sure that the product is consistent and that meeting planners have a good experience. And I think what we've seen around that is there have been a few rooms that have been introduced into our portfolio as a result of that.

So I think on the group side, it's played out as we might have thought. The reception from meeting planners from what we hear has been good in terms of their experience on site, and we'll continue to see how it performs.

So it sounds like it's been a net positive for you, opening up the Gaylord.

It has been. And I think it'll -- that will continue to grow as the they introduce customers to the Gaylord brand and those customers then begin to rotate. We saw that whether it was opening the Texan or the National or the Rockies, each time we've grown distribution. We've seen new customers come into the brand and then ultimately rotate. And if they enter it in a higher-rated market like San Diego, they rotate at a higher rate. So, when we look at those customers who have entered the brand thus far through Gaylord Pacific, we look at that multiyear contract, they rotated about a 9% higher rate than our typical rotational customers. So that -- again, that same phenomenon we've seen historically has continued to hold with the Pacific opening.

Okay. And then how about this new property that opened in Glendale?

It's really not competitive. It's kind of a leisure oriented. I think they've got a big -- they've got a big like surfing wave pool, and their concept is to have this large hotel that kind of surrounds a concert venue. So, if you go to bed early, I would stay somewhere else.

Okay. I wanted to go back, you mentioned you're investing across the portfolio. I think it's about $1 billion program, putting aside the Gaylord Rockies, which I realize the timing is kind of unclear. But how are you thinking about what percent you should be seeing incremental returns on that investment versus like new car bidding or something, which probably doesn't get a particular an ROIC, if you will?

I mean, we've said that we target at least mid-teens unlevered returns on any growth projects. And as far as the multiyear investment capital plan goes, we've initiated all of the projects we've talked about with the exception of the Gaylord Rockies, as Mark has just talked about earlier.

So it's mid-teens on the entire $1 billion investment you're thinking?

There are some components of it that some would argue could be maintenance, i.e., we've done some room renovations as part of that. The Gaylord Texan rooms are underway right now and should wrap up midyear, and then we'll be picking up the renovation of the San Antonio Hill Country rooms after the Valero open this year.

And then one thing you mentioned on the call, I think Colin mentioned, I think he's paraphrasing, it's like we have such a small percent of this group business. Could you talk about how -- what do you think your percent your share of group business in the U.S. is? And how do you go about driving incremental share, bringing new, I guess, higher-paying groups into the mix, which I think is part of your strategy?

Sure. We actually put out a deck earlier this week in advance of these conversations we're having with all of you and put out some data to put a finer point on that. And we've estimated that the group meetings business is around 240 million room nights in the U.S. And so we're 1% of that, it's very small.

And the other point that we would make in describing our piece of that is that we are focused on a particular type of group meeting. There are obviously a large variety. When you look at the 243 million, there are citywides that travel to convention centers, and there are much smaller groups. We're focused on what we feel is a very profitable segment of group meetings, which is those 600-plus on-peak group room nights, half of our group room nights being corporate focused with a lot of our capital allocation right now towards investments that will continue to drive, hopefully, more premium corporate group types.

When you look at the STAR data, you can -- and it's actually in that presentation, I think, you look at our market share premiums, we've grown most dramatically since pre-pandemic. And if you look at our revenue and profitability, we've grown that dramatically as well. And most of that growth has come through, again, growing rate by investing in these properties and changing the value proposition for meeting planners and consumers. We're not back to pre-pandemic occupancy levels across the brand. So we see a real opportunity to continue to drive our occupancy as we continue to make this mix shift into these higher rated customer segments. And so there's a significant incremental profitability opportunity for us there just on a same-store basis.

I don't know if you have this handy, but when you talk about 240 million group room nights in the U.S., do you have a sense of what percentage of that is in Las Vegas?

I don't have that data right in front of me, but clearly, Las Vegas is a top meetings market.

Okay. Because that's not really -- you're not really competing with that market. I think that was always like a point that you guys tried to make, like there's a certain number of group meeting people that don't want to have meetings in Las Vegas. Is that still part of your...

I think, that's fair. I mean, I think there are groups who have an opinion and a perspective on all markets about where they would want to go and where not to go. I think, Vegas has very specific attributes that probably don't appeal to a lot of the groups that want to travel to our properties, right? The gaming element being one. And -- but our product size-wise does obviously put us in a, I guess, a sourcing conversation for certain size groups.

One of the topics we're kind of exploring with every company is the deployment of AI and how you at Ryman are thinking about either efficiencies or other opportunities internally to use AI?

Yes. So depending on the business, on the hotel side, obviously, we are tied to Marriott's activities in the platform and the strategy that they're developing. For our hotels specifically within that context, some of the areas, I think, where we're most interested in are doing some work is really around the sales process. How we think about pricing and yielding and managing these longer booking windows, if you think about we're committing contractually to business, on average, 3 years in advance, but in many cases, 8, 10 years in advance.

So as you think about manipulating large amounts of data and trying to do predictive modeling, it's an area where AI, we think can help us dramatically. And then obviously, there's a lot of interest in how AI can help us on the labor front in terms of these larger operations, like I think most of our peers are interested as well.

On the entertainment side, we're doing quite a bit of work really around things like marketing, customer acquisition, how we think about dynamic pricing in terms of live entertainment and venues and then operational efficiencies as well. But we're really just getting started.

Is that mostly buying off the shelf? Is it building, partnering? How are you thinking about the actual deployment of it?

Certainly, on the entertainment side, it's buying off the shelf. With Marriott, we'll -- they're in the process right now, I think, of really developing and executing what their longer-term strategy. I would assume that, that will be some combination of off-the-shelf plus some -- given their scale, some proprietary platforms.

Maybe we can switch to the entertainment business for a moment. First, you have a 35% partner in that space. They have a right to buy up or put back to you the business. Can you just remind us when those options come back into play for them and maybe how your relationship with them is going?

Sure. I think you're talking about our Atairos partners in OEG. They own about 30% of that business today. They do have a right with that respect -- with respect to that 30%. To put it back to us in the event that they call for an IPO of that business and we determine as the majority owner that it's not the right time to pursue that particular transaction and decline to move forward with an IPO. They could put that back to us at a contractual amount that's already, really reported on our balance sheet as their non-controlling interest value.

So -- and we would, if that were all to happen, be able to elect whether or not we would settle that put right exercise in cash or shares. And we could also elect the timing of that settlement to occur over 3 years as opposed to immediately. So that's the mechanics of it.

Yes. And I think as it relates to an IPO and the timing of an IPO, I would just -- all I would say is that I think that we are well aligned with Atairos in terms of how we think about that, the timing and what that opportunity could -- may or may not look like.

Don't those rights kind of come in and out when they have a right to buy up or right to put back to you? Or is it always available to them?

So they're right to buy up additional shares above their 30% up to an additional 19% was available to them annually since they came into the investment through last fourth quarter at the end of the year. The timing was a window at the end of the year so that we could provide them the data around our REIT compliance limitations. The value was already contractually set based on a trailing 12 months, profitability, adjusted EBITDA defined metric in that investment agreement. So those windows opened and closed essentially at the end of every calendar year.

Okay. Okay. And in terms of like the big growth drivers there. I know you've got -- you've got the Category 10, right, under construction in Las Vegas. It's near your Ole Red facility, I think, sort of down the street a little bit, right? In the Flamingo, right, that where it's opening. Okay.

It's in front of a Flamingo, where the old Margaritaville was right where the link ties into the strip across from Caesars.

Okay. I mean when is that expected to open?

That will open this fall.

Okay. And are you -- I mean, are you kind of pre-booking? Or how are you thinking about the opening there? I mean, is it going to do a lot of corporate or is it going to...

Yes, it will do -- all of those venues do a significant amount of special events and buyouts. And so we have sales folks that are already working on that.

Okay. And then you announced another venue opening, I think, in Universal Studios, maybe -- is that -- can you just remind us?

Yes, here in Orlando.

What is it?

We're not in Orlando anymore.

We're not in Orlando. Yes, I was in Orlando yesterday. Sorry. Yes, in Orlando. That will open late next year.

Okay. And that's a Category 10 as well?

Correct.

Okay. Okay. And you have one in Nashville.

We do -- it's the former Wildhorse, that was converted.

And just -- so everyone knows, these are kind of in conjunction with Luke Combs, Country Star.

Correct.

Okay.

Country superstar.

Country superstar, yes, sorry. Yes. Are you -- I mean, are those the main drivers of growth? Because you've also made some headway into kind of festivals. I know you're managing some auditoriums, which looks like there's some out-of-pocket going into, but not that much.

Yes. So Category 10 is another brand within kind of this kind of artist-inspired venue category. We also have a concept with Blake Shelton called Ol' Red.

And then to your point, Smedes, we bought a controlling interest in the festivals business. And so, we now kind of have established ourselves with a platform in that festivals business that we can now grow in that vertical. And then in the last 4 months or so, we were selected in an RFP to operate the Ascend Amphitheater in Nashville and also in another RFP to operate an amphitheater in Simpsonville, South Carolina.

And so that puts us in the amphitheater vertical. And so if you look across the business, what we're doing is that we're establishing growth platforms in these different verticals that service the same customer and then also allow us to, as we grow, leverage things like marketing, sponsorship, ticketing, et cetera, and to build scale.

All right. We're coming down to less than minutes. We do have two final questions I want to ask you. I guess, first, as you think about the public hotel REIT space, do you think there'll be more fewer or the same public companies a year from now?

Should be fewer or they'll be the same.

I need one answer.

The same.

Okay. And then if we think nationwide RevPAR could be 2% in 2027, what do you think same-store EBITDA could be? Nationwide, not for you.

Yes. Not for us, I would say probably flat to slightly down. I think the real story here will end up being mix. I think that quality group hotels, quality luxury hotels will have the -- could have the ability to grow their EBITDA margins despite that lower growth rate, at least that would be my expectation for us.

Thanks for your time this morning.

Thank you.

Good morning, everyone. Welcome to the Ryman Hospitality Properties Fourth Quarter 2025 Earnings Conference Call. Hosting the call today from Ryman Hospitality Properties are Mr. Colin Reed, Executive Chairman; Mr. Mark Fioravanti, President and Chief Executive Officer; Ms. Jennifer Hutcheson, Chief Financial Officer; Mr. Patrick Chaffin, Chief Operating Officer; and Mr. Patrick Moore, Chief Executive Officer, Opry Entertainment Group. This call will be available for digital replay. The number is 1(800) 688-9445 with no conference ID required.

[Operator Instructions] It is now my pleasure to turn the floor over to Ms. Jennifer Hutcheson. Please go ahead, ma'am.

Good morning. Thank you all for joining us today. This call may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements about the company's expected financial performance. Any statements we make today that are not statements of historical fact may [indiscernible] be forward-looking statements. Words such as believes or expects are intended to identify these statements. which may be affected by many factors, including those listed in the company's SEC filings and in today's release.

The company's actual results may differ materially from the results we discuss or project today. We will not update any forward-looking statements, whether as a result of new information, future events or any other reason. We will also discuss non-GAAP financial measures today. We reconcile each non-GAAP measure to the most comparable GAAP measure in exhibit to today's release. I'll now turn it over -- I'll now turn the call over to Colin.

Thanks, Jen. Good morning, everyone, and thanks for joining us today. We're pleased to report full year results above the midpoints of our guidance ranges. And for the entertainment segment as well as AFFO and AFFO per share above the high end of our guidance ranges. The fourth quarter came in ahead of our expectations at the start of the quarter due to strong reception for our holiday programming in our hotel portfolio and better-than-expected volumes in our Downtown Nashville entertainment venues.

Looking back at how we expected '25 to play out when we first provided guidance a year ago, our results, excluding the JW Desert Ridge acquisition are almost right on the midpoints of that initial guidance range. To be in the position we sit in today is an incredibly accomplishment in what was a challenging year and a testament to both the strength of our business model and the quality of our people. Importantly, we managed last year's volatility while continuing to advance our long-term strategy.

Our investments in the portfolio continue to differentiate our platform from our competitors and attract more premium group customers. In our hotel portfolio, we acquired the JW Desert Ridge, an asset that's long been at the top of our acquisition list which expands our rotational group customer strategy into a new top 10 meetings market and creates opportunity for a second rotational pattern within the JW Marriott brand. Also, we continue to progress our multiyear investment plan for Gaylord Opryland.

To date, we've now refreshed about 40% of the hotel's existing competing meeting space and we're nearly halfway through the 100,000 square feet meeting space expansion, which will open next year. Foundry field house the new sports bar development with premium indoor outdoor reception space will open in April of this year. Our recently completed investments are generating early returns. Gaylord Palms and Gaylord Rockies, which received meaningful investments in 2024, both delivered record top and bottom line performances in '25. And given the rotational nature of our customer base, these improvements are driving meaningful share gains for the portfolio as a whole.

For the trailing 12 months through the end of December, the same-store portfolio achieved the highest RevPAR index to the Marriott defined competitive set in the portfolio's history, excluding, of course, the COVID impacted periods. In our entertainment business, we've continued to expand our growth platform, especially in festivals and ampitheaters. This includes our latest win to program and manage the 14,000 square feet of 14,000 seats capacity CCNB ampitheater in Simpsonville, South Carolina.

Our partnership with Southern entertainment, who's been producing the Greenville County music festival at CCM since 2018, helped us build a strong relationship with the city of Simpsonville and our combined capabilities and expertise offer a compelling solution. This success, in particular, underscores the strength of our platform model. In addition, we are continuing the expansion of Category 10 -- at the Category 10 brand with our friend [indiscernible] with a Las Vegas location opening in the fourth quarter of '26.

And with the third location to be developed at Universal CityWalk in Orlando adjacent to the Islands of Adventure Theme Park. Early returns on our investments behind Opry continue to exceed our expectations. Programming in October, the official birthday month produced a record number of shows and attendance resulting in an all-time high monthly revenue and adjusted EBITDAre for the brand. We expect this momentum to continue into '26 and before and beyond.

Now before I hand it over to Mark, a comment or 2 about what lies ahead. A week ago, I received a monthly report from an outside organization comparing returns for publicly traded lodging companies. It's worth highlighting that since our REIT conversion announcement in 2012, our stock has generated a nearly 12.5% annualized return, including reinvested dividends. This represents a rate of return of approximately 2.5x greater than that of our next highest REIT peer over the same period. This is quite an incredible difference, anecdotally reflecting about the last 13 years and how we're positioned for the future. It would be my view, and I think those of my colleagues that we're certainly better positioned today to create value than we were back in 2013.

At our Hotel business, we now own 7 world-class market-leading hotels, which are in great physical shape and most of which we plan to enhance and/or expand over the years ahead to make them even more competitive in the markets that they are in. Over the years, I've heard some members of the analyst community questioning the underlying strength of the large meetings industry, particularly in economic economically trying times. And there was some of this during the last year's third quarter. But the reality is the large meetings industry is massive here in the United States and the Gaylord Hotels brand has such a small share, but our relationship with the meeting planner is so good, and we believe we can capture more share as our rooms and meeting space grows and our relative positioning continues to strengthen, supported by our fabulous service levels and our people-centric culture continues to thrive.

And from an amenities perspective, we're constantly upgrading, adding sports bars, upgrading restaurants and expanding pools and other amenities. Yes, our hotel business is awfully well positioned as we look to the future. And then, of course, so is this gem of an asset we own that we refer to as our entertainment business. That's growth characteristics are materially better today than back in 2013. It's quite incredible what is happening to the music we call country. as its popularity explodes all over the world and creates the desire for folks to come visit Nashville.

Live Entertainment is a very valuable asset in this day and age, and we're deeply engaged in figuring out the best possible path to create even more value for our shareholders. Now hopefully, those of you who have followed our company for a while will remember that back in -- back a couple of years ago, we laid out a 4-year plan to the investment community at our Investor Day in January 24.

By the end of '26, we expect to have initiated all major capital projects in the plan. with the possible exception of the Gaylord Rockies expansion, and we will have meaningfully expanded OEG's growth platform as well. Looking ahead, we continue to feel very comfortable with the targets we outlined then, and we look forward to updating you on our progress as milestones are hit. As we embark on 2026, the period ahead looks awfully exciting for us. And as always, we appreciate your interest and support. Now with that, let me turn you over to Mark.

Thanks, Colin, and good morning, everyone. I will review our fourth quarter results and also provide some color on how we're thinking about 2026. I'll start with our hospitality business. Our same-store hospitality segment delivered the highest total revenue of any quarter and the highest adjusted EBITDAre of any fourth quarter driven by strong demand from holiday programming and higher leisure volumes across the portfolio.

ICE! ticket sales increased more than 14% to a record 1.5 million tickets. The Gaylord National had its best season since 2010 and in Opryland and the Rockies had their best seasons ever. In its second year, ICE at the JW Hill Country achieved the highest guest satisfaction ratings for holiday attractions across the portfolio. Leisure performance at Opryland was a bright spot in the quarter. Both leisure demand and leisure ADR increased year-over-year and record ice volumes contributed to strong flow-through.

Our group business also performed well. Same-store attrition [indiscernible] improved year-over-year and sequentially from the third quarter and same-store banquet Navy revenues were up nearly 5% despite lower corporate group volumes compared to last year. same-store banquet Navy contribution for group room night, a proxy for catering spend per group guests increased more than 10% year-over-year, an indication that once on property groups continue to spend at healthy levels. In the fourth quarter, the same-store portfolio booked more than 1.2 million gross group room nights for all future years.

Notably, meeting planner sentiment improved as the quarter progressed leading to record room night revenue and ADR bookings production for all future years during the month of December. ADR in those December bookings was up more than 10% compared to what was booked in December of 2024. The result at the end of December, same-store group rooms revenue, room nights and ADR in the books for all future years were at all-time highs. Looking ahead, our same-store group pace for 2026 and 2027 remains healthy.

For 2026, same-store group rooms revenue on the books is up approximately 6% compared to the same time last year. for 2025. And as expected, we entered the year with approximately 50 points of occupancy on the books. For 2027, same-store group rooms revenue on the books is up approximately 5% compared to the same time last year. and ADR on the book continues to pace up in the mid-single digits range. The number of new leads and late-stage opportunities also remains near record levels. Let me make a few comments on the JW Marriott Desert Ridge before moving on to entertainment. The fourth quarter results were in line with our expectations.

Transient demand increased nearly 10% year-over-year supported by expanded holiday programming, which we view as an encouraging indicator ahead of introducing ICE! in 2026. The more that we learn about this property, the more bullish we are on its long-term potential under our ownership. Now turning to our entertainment business. Entertainment segment delivered fourth quarter revenue growth of nearly 12% and adjusted EBITDAre growth of nearly 13%.

As Colin mentioned earlier, the Opry delivered a record quarter behind strong October birthday month programming in attendance. In addition, a strong show calendar at the Ryman and improved volume in our downtown Nashville venues contributed to the growth. Before I turn it over to Jennifer, let me provide some color on our initial guidance ranges for 2026. For our same-store hospitality business, at the midpoint, 2.5% implies modest assumptions for growth in group rooms revenue and flattish leisure performance.

As I mentioned earlier, group room revenue on the books for 2026 is up approximately 6% compared to the same time last year. The difference between our pace entering the year and our RevPAR growth guidance range includes assumptions for in the year for the year group bookings group attrition and cancellations and transient leisure performance. Historically, it's typical for RevPAR growth to actualize lower than the group pace at the beginning of the year. Same-store total RevPAR growth also 2.5% at the midpoint reflects growth in banquet and AV revenue behind stronger corporate mix and contribution from the new sports bar at Gaylord Opryland beginning in the second quarter.

The midpoint of guidance range for same-store hospitality adjusted EBITDAre implies approximately 2.5% operating expense growth or 10 basis points of margin expansion as we continue to work with Marriott to improve efficiencies. The level of macroeconomic uncertainty and its impact on meeting volumes and meeting planner sentiment will be the primary driver of how our actual full year results compared to this initial guidance range. Given the current political and economic environment, here and abroad, we believe a measured view of demand is prudent. For the JW Marriott Desert Ridge, the midpoint of guidance range for adjusted EBITDAre reflects our first full year of contribution. The meeting space conversion currently under construction remains on track to open in April 2026 and we have assumed some modest marketing investment behind the launch of our ice holiday programming at the property.

And finally, for our entertainment business, the midpoint of the guidance range for adjusted EBITDAre reflects nearly 10% growth year-over-year on increases in our existing businesses as well as contributions from our recently announced projects coming online in 2026. Note that 2026 seasonality will be more heavily weighted to the second quarter compared to 2025. The first quarter of 2025 is a challenging comparison for both business segments and recent winter storm Fund was a modest drag on January results.

For the same-store hospitality business, we expect first quarter RevPAR and total RevPAR to be roughly flat an adjusted EBITDAR margin to decline approximately 100 basis points. The Entertainment business, we expect first quarter adjusted EBITDAre to decline by several million dollars. With that, now I'll turn it over to Jennifer to run you through our financial position and cash flow expectations for 2026.

Thanks, Mark. Starting off with liquidity. We ended the fourth quarter with $471 million of unrestricted cash on hand and our revolving credit facilities undrawn. Total available liquidity was nearly $1.3 billion. We've retained an additional $29 million of restricted cash available for FF&E in our maintenance projects.

Turning to the balance sheet. At the end of the quarter, our pro forma net leverage ratio based on total consolidated net debt to adjusted EBITDAre, assuming a full year contribution of adjusted EBITDA are from the JW Marriott Desert Ridge was 4.3x. In December, Fitch upgraded our corporate family rating to BB from BB- which in turn lowered the applicable interest rate margin on SOFR for our corporate term loan B from 200 basis points to 175 basis points. And in January of 2026, we successfully refinanced our corporate revolving credit facility, increasing the size from $700 million to $850 million and extending that maturity from May 2027 to January 2030.

Pricing and other terms of that agreement are largely similar to our previous credit facility agreement. Pro forma for this transaction, total available liquidity increased to approximately $1.4 billion. And finally, let me comment on our anticipated major cash outlooks for the year. regarding our outlook for capital expenditures in 2026, we expect to invest between $350 million to $450 million, primarily in our hospitality business. Our earnings release provides more detail on our capital plans and expected project loan costs.

Regarding our dividend, we are pleased to announce the declaration of our first quarter dividend of $1.20 and payable on April 15, 2026, to shareholders of record as of March 31, 2026. It remains our intention to continue to pay 100% of our retaxable income through dividends. With that, [indiscernible], let's open it up for questions.

[Operator Instructions] We'll go first this morning to Cooper Clark, Wells Fargo.

Curious if you can provide an update on your group business mix for the year and how that's impacting your spread between RevPAR [indiscernible] assumed in guidance?

Yes. We are in a position as we entered the year with a higher level of corporate mix on the books. It's about 3 points higher than last year, a decline in our other segments and [indiscernible] as a result. So that positions us well for outside-the-room spend as we head into this year.

Great. And then I appreciate some of the earlier comments in the prepared remarks on the RevPAR guide, but hoping you could provide some additional details on the puts and takes as we think about the 2.5% midpoint within the context of group pace for the year? Just trying to think about some of the headwinds potentially embedded in guide as we contemplate last year's higher initial RevPAR guidance on lower group pace? .

Mark, do you want to take that?

Yes. I mean, so typically, when you enter the year, you're typically going to -- by the time you factor in your in the year for the year, your attrition to cancellation in your leisure business, you're typically going to finish the year at a lower average RevPAR growth. And as we mentioned in the prepared remarks, what we're really looking at is a combination of what we pick up from in the year, full year bookings as well as attrition and cancellation. We're not -- I would tell you that our guidance doesn't assume any major shift in what we're seeing in trends. As I said, we are in our guidance reflects flattish leisure business. And broadly speaking, what I would tell you is, is that what it ultimately reflects is what we don't know about what's happening in the economy. When you look at what transpired last year with Liberation Day, tariffs on and off, some of the different political and geopolitical issues that are occurring right now in the economy and how they're influencing our meeting planner sentiment as well as meeting planner trends. There's just not a lot of clarity into how things how things are going to unfold this year. So as I said in my remarks, we felt like that it's prudent to have take a fairly conservative view on demand for the year, and we'll see how it shakes out. And we'll update you as the year progresses on how we're performing.

We go next now to Patrick Scholes of Truist Securities.

Two questions. One, can you share any additional or latest thoughts about possible development or expansion at the Rockies? That's the first one.

Mark, do you want to take that one?

Sure. So we continue to work on expansion, as you know, Pat. That's an asset that pre-COVID we were prepared to expand. That business, as you know, has performed extremely well. And we're very, very bullish on that market in the long term for long-term potential of that market. As we've said on previous calls, we're working through a number of issues at the local level in terms of property taxes, et cetera. And those -- that work will ultimately determine how we expand and when we expand. But I think we'll have more to say on that over the next few quarters.

I think, if I may, that hotel this year. I think it's right, Patrick, has the highest occupancy and the demand for group in that hotel is as strong as it's ever been. And I think we're a lot nearer pulling the trigger on an expansion in that hotel today than we were a year ago. I think as Mark said, I think you just got to be a little bit patient with us over the next 1 or 2 quarters, but we really do like the trajectory of this hotel.

The other comment I'd make is just to remind everyone, -- the investments that we made over the last couple of years, the new food and beverage and the new -- some of the new meeting space that all -- all those investments were made to accommodate an expansion. So from a food and beverage capacity and meeting space capacity, we're prepared to receive additional rooms [indiscernible]

And those investments are really paying off right now. They're doing extremely well.

Yes. Second one, just a little bit more backward look here. You did have a sizable year-over-year increase in the year for the year cancellations in the quarter. Now granted, it was only like 5,000 room nights, but what drove that? Was it government cancellation? Anything else or not government, but the government shutdown related in solutions.

Yes, great question. This is Patrick Chaffin. Yes, to your point, cancellations are up about 3,000 room nights, but they were down significantly versus Q3, which is when we saw a lot of the impact of the tariff situation. but they were in line with levels that we saw both in 2016, 2017, 2018 and 2019 before COVID. So we're not concerned in any way. And if you look at the nature of the cancellations to your point, they were all companies specific. There were no macroeconomic concerns or reasons given. Mostly, it was CEOs or C-suite turnover as the primary reason for the cancellation. So not macroeconomically driven and in line with what we saw prior to COVID. So we were not concerned.

And let me remind you and everyone else that -- we have really good contracts. So when cancellations occur close both in, we tend to collect the profitability loss. So our business model is very different to most of the other hotels that you followed.

We go next now to Smedes Rose with Citi.

I wanted to ask you, you mentioned in your opening remarks significantly better holiday programming results. And I was just wondering -- do you think you just went into the quarter being conservative, given what had happened in '24, where I think sort of a disappointing results? Or what are you sort of marketing or ticketing differently kind of what maybe did you learn this year that maybe can work going forward?

There's multiple things. So do you want to give it a shot, Patrick?

Sure. Smedes, this is Patrick. Good question. We did a lot of research in September to try to understand the mindset of the consumer going into this holiday season. And it was very clear that there was a very conscious attitude and really focused on value as we're entering the season. So we shifted a lot of our marketing to buy early and bundling opportunities and that started the volume of demand on the books early and we really built from there. Once we saw the consumer get on property, they were hesitant. So we feel that we made the right decision in getting them to book early through bundling and special offers. But as you can see, it still generated really, really solid revenue for us. So getting folks on property and getting them exposed to our food and beverage opportunities and other outside the room spend really paid off for us. I would tell you that until we see a dramatic shift from a macroeconomic perspective, we're probably going to maintain that same strategy of getting folks in early and booking early and giving them bundling opportunities to do so, so they see the value. But we were very, very proud of where we performed this year and have some exciting news that we'll be talking through in July as far as themes for next year that we think will drive even more demand.

Great. And then can I just ask you, you mentioned in your release $23 million of EBITDA disruption in '25. Does your outlook incorporate a certain amount of construction disruption this year as well?

Smedes, it's Jennifer. Yes, it does. We have those projects that are outlined in the release that are continuing on into 2026, largely at Opryland and of course, the rooms renovation wrapping up at the [indiscernible] as well as the rooms renovation in the Hill Country JW that will kick off midyear or post April after the Valero open. So those will have some impact on the results and our expectations for 2026 and we would not expect those to be meaningfully different than what we saw in '25.

We'll go next now to David Katz with Jefferies.

I wanted to just focus on the Entertainment business. Mark, I think you may have said in your prepared remarks that 1Q entertainment should be down -- could you -- would you mind repeating yourself just a bit and two, just giving us some color on the cadence for the year as we think about the entertainment business and what's driving that cadence.

Yes. So in terms of the cadence for the year -- well, actually, do you want to...

Sure. Sure. Yes. This is Patrick Moore Yes, a couple of things in Q1. One, we had the launch of ARI-100 last year as an NBC special that that was a little bit of a spike in March. But most of what you're seeing from a Q1, the rest of the year is a shifting and concert count across the portfolio, which is much bigger and the concentration in both amphitheaters and festivals in that Q2, Q3 period. So that's -- those are part of the reasons for that shift.

Okay. And if we could just get an updated view while we have you on sort of how you see the earnings power of this looking out years, couple of years into the future, where should we be setting our sights on what this business can do as you see it today?

Do you want me to take?

Yes, please.

David, Colin. This business, in our opinion, is awfully valuable. Live entertainment is such a sort after commodity in this day and age. And I think we see a lot of growth in this business over the next 3, 4, 5 years. And I can tell you that the folks in this from Patrick actually more Mark and myself, we spend more of our time fielding inbound opportunities on this business than we do, certainly on our hotel business. The opportunity for growth in this business, I think, over the next 2 to 3 years is extraordinary. We think that we will plug in more anti theaters. We believe that we'll do more category terms more REDs. And I think -- and I think there is opportunity here here in Nashville for us to take all of our undeveloped labs around the Opry House. And we have, I don't know, 12, 15 acres of undeveloped land there to do something fairly spectacular for our business in the city of Nashville to to accommodate the amount of people that are just pouring into Nashville now wanting to experience country music in its real authentic form. So we're not going to give you numbers for '27, '28, '29. But I can tell you, our Board last week reviewed our own range plan for this business and it is very attractive. And we like what we have on our hands here, and we're trying to figure out how we create even more value for our shareholders than we have over the last few years. I know that's a bit waffly but we've got a lot of things we're working on on here, David. And this is an outstanding business.

We'll go next now to Duane Pfennigwerth with Evercore ISI.

I appreciate the commentary about acknowledging what you don't know about how the macro will play out this year. But I wonder if you could comment on what your business is telling you. If we play back what you saw in the fourth quarter from a group demand perspective for future bookings, are you seeing any changes in booking patterns versus what you'd normally expect for a fourth quarter? Any particular types of customers or industries that stood out positively or negatively?

This is Patrick Chaffin. Let me hit a couple of things here. First, I'd start with bookings. As far as what we saw in the fourth quarter, I would say the most important thing was we saw an easing in the tensions that have been created by the tariff situation back in April of 2025. So if you think about it, recall that our leads were down about 4% in the third quarter. and we were messaging on that third quarter call that there could be some hesitancy on the part of meeting planners as we move through the fourth quarter regarding forward bookings because of the macro situation, and we're going to watch that and see what would happen. October, November really followed that trend where we saw leads down and production down. But then December, which is the most important bookings month of the entire year for us, came roaring back, and we saw medium planners relax in their hesitation. And our sales team came through really, really strong with the very best December production in terms of room nights that we've ever seen in the company's history, and ADR continued to be strong. So that's a clear indication that we weren't just selling room nights to get room nights off the door, but we were doing it at a growing rate would ended up being a record for the company. So we were encouraged by what we saw develop as we went through the fourth quarter in bookings because it did indicate that the tension around tariffs was starting to ease. We've talked a little bit about leisure, when we hit that side of the business. We are talking about flattish, but the reality is if you dig into that, leisure is flattish because of the renovations that are going on at Texan and Hill Country and the fact that we have more group room nights on the books. And so some of that group is blocking out some of the transient opportunities. And so when you consider that and you look at the hotels that don't have renovations they either have more group business on the books or they actually see an improvement in leisure year-over-year. So group business is moving in a good direction. Leisure looks very, very strong. as we look at spring break, everything is coming in as we expect thus far, we're still early in that process or in that time line, but we see nothing that gives us concerns. And then governments -- the last thing I'l hit. There's been a lot of concern around government business. we've been pivoting away from it, and it composes less than 0.4% of what's on the books for us. So we feel like we're in the right group business right now given everything that's going on and our leisure business remains strong. So fourth quarter for us gave a lot of confidence that we're in a good spot going into this year.

And just talk a little bit about [indiscernible] In terms of performance.

And just in terms of the move to the meeting plan because this is what Duane is asking.

Yes. I mean the move of the meeting planner has remained resilient, I guess, I would say. We went into the month I would tell you that were storm firm obviously had an impact on us, but we were pacing ahead as we started January until we got to that winter storm and medium planner sentiment remains very resilient and interested in booking forward. So our funnel remains strong, and we feel good about where forward bookings are heading.

These are good attrition cancellations, really no issues. On property spending is still very good. So the early indicators that we look for, we're not seeing anything flashing yellow or flashing red. It's really just a recognition of the fact that when you look at what's happened over the last 12 months, environmentally, it's very difficult to predict where we're going to be tonight after the state of the union, let alone 6 months from now.

Yes. And look, -- the other point I want to make, and I sort of try to make it in my prepared remarks is that the folks sitting around this table that have been looking after and building this hotel business, we've been doing this for 20 years. And we -- over the period -- over this period of time, we have dealt so many times with the mood of the meeting plan is shifting, yet our returns and our business and our performance we sail through that because our relative positioning is so strong compared to those folks that we compete with. And so yes, the meeting planners move may shift in negatively like it did in the third quarter of last year, but our business will be just fine.

We go next now to Chris Woronka at Deutsche Bank.

I was hoping to get a little bit more color on how you expect the pavilion new sports far patio complex at Opryland, how that's going to kind of unfold over the next couple of years? And the question really is, is it meant to draw a little bit more lease shoulder periods and weekends in addition to being obviously a big amenity for groups or just kind of thoughts on whether that helps leisure in addition to group at Opryland.

Chris, this is Patrick. I would tell you that the sports bar is all about sea count. Gaylord Opryland does not -- is not able to accommodate the demand that it has for food and beverage. There are just not enough outlets in that hotel. And so we're adding taking the best of what we've learned at Texan and Palms and Rockies, we're building the sports bar as far as the size and the capacity and then putting that [indiscernible] right next to it, 12,000 square foot of [indiscernible] so that you have an indoor and outdoor component, and we've added a whole lot of flexibility to it. So you can sell 1 portion of it, you can sell the entire restaurant it is a very flexible outlet. And so this is all about adding seat count and giving additional buyout opportunities to groups who want to get their folks together. It is strategically located right outside of the convention center because we know that as folks are coming out of the convention center. They want to go with a group of folks that they've spent the whole day with and sit down and have a beer or a drink, watch a show, spend some time together. And so we feel this is both a leisure opportunity for us when we're in the off season for group but primarily a group opportunity for buyouts and just capturing more seats, more demand in-house for Opryland because it just does not have the seats necessary to support demand.

Yes. And what I was going to say, Patrick, is that when we have done this before, this is not our first rodeo. We've done this before in other hotels, and the returns on the investment have been spectacular. It's just that we haven't had one of these in this particular hotel, which is really candidly the most successful convention resort in the United States of America. This year, that hotel will push $200 million of EBITDA out of it. I know we don't break it down in our guidance, but there is not another hotel like this in America. And so we believe, because of the volume of consumers in this hotel, both group and leisure. These -- the returns on investment here will be very encouraging.

And Chris, this is the first outlet of a multiyear kind of food and beverage refresh and expansion at Opryland. It's -- to Patrick's point, it's increase the seat count to capture demand that is there that we are not monetizing. And it's also to raise the level of food and beverage experience in that hotel as we track more and more premium corporate customers to that property.

And I would tell you the -- both with what's happening in the media space renovations and the new expansion as well as the sports bar site visits to this property are revealing a lot of excitement from [indiscernible] so starting to lay eyes on this. It's all been a rendering and a promise for the past couple of years, and now they're seeing it come to fruition. And there's a lot of excitement and a lot of energy to get booked into these spaces.

Okay. A lot of great color there. Appreciate that. Just as a follow-up, and this goes back to the entertainment OEG, which I agree you guys done a great job of building over the years. Maybe, Kyle, a strategic question or remark, I mean are there any impediments to franchising potentially one of those brands, you got Category 10, [indiscernible]. I understand the REIT framework, but I think you probably have some room within that if this was something you wanted to do. So any thoughts on whether that's being considered?

Well, it's very interesting is that question. the music of this thing, when you look at what is happening in markets like the United Kingdom, you look at throughout Northern Europe, France, Holland, Belgium. [indiscernible] comes will go over and play Wembley Stadium in July, 3 nights sell out Wembley Stadium, 80,000 people at night. You go to Ireland playing [indiscernible], 80,000 people there goes to Murrayfield in Scotland, plays that stadium sold out already. That will happen in July. And so the demand for this music overseas is very, very, very high, very strong. And I think our view is that the opportunity to expand the brands that we have built with these iconic artists are really, really good. But I think we would like to -- if we do it overseas, we would want to find a partner that does it on our behalf. So we don't have to set up shop in these countries. But the answer is yes. is a big opportunity, and it's a bigger opportunity because of the popularity of what is happening to the product of the city on a global basis.

We'll go next now to Aryeh Klein with BMO Capital Markets.

I was hoping to get a little bit more color on the total RevPAR guide for '26. It looks like in '25, reprint total RevPAR kind of grew similarly. And in '26, you have the benefit of a higher corporate group mix component. Why wouldn't we expect total RevPAR growth to outperform RevPAR growth this year?

Yes. Some of that is just the law of numbers, Aryeh, with a bigger base on RevPAR than it is to [indiscernible] Patrick Chaffin mentioned earlier that it's about a 3-point swing. And corporate mix does tend to, as you know, outperform outside the room, but we also can get good performance from premium associated and noncorporate groups as well. And we saw that did play out favorably in the fourth quarter of 25 as well. So I think those are the factors to think about when you think about the relative room revenue -- RevPAR [indiscernible] outlook '26.

Okay. And then, Colin, you mentioned the potential rotational benefits with KW DR and a new market, recognizing that it's still fairly early. What are some of the early trends you've been seeing on that front?

Could you repeat that first part of -- the first part of the question?

Just in terms of the rotational benefits with JW DR and having a new market to offer fully recognize that it's still early, but just curious what some of the early trends you're seeing there from a rotational element standpoint?

Yes. So with Desert Ridge and Hill Country both in the family now, we are -- we talked about this in the last quarterly call that we had hired a couple of positions that would focus just on that multiyear rotational business moving them back and forth between the JW's and then JW to the Gaylord. And I would tell you that we've had some good success. We've only had about 1 quarter of having those positions in place, but we've booked about 22,000 multiyear room nights that were manufactured just as a result of that JW relationship of the 2 hotels being able to push back and forth to each other or over to the Gaylord. So we continue to believe that there's upside here, and we'll continue to push that really hard.

And Patrick, de facto in what you've said, we've aligned the sales organization. So Men,just talk a little bit about that.

Yes. So we have a really strong sales team in the Gaylord side of the house, and we have added resources to ensure that there's more communication and more synergy between the JW and the Gaylords and that we're taking all the learnings from creating a multiyear rotational business across the Gaylords and applying that to the JW and that is what we're starting to see gain some traction.

We'll go next now to Dan Politzer with JPMorgan.

First, I want to touch on the leisure. Obviously, your guidance reflects a flattish outlook there. Can you maybe talk about what you're seeing across your portfolio specifically, what's embedded in your outlook for Nashville, just given that was a bit of a headwind in 2025 on the leisure side.

Yes. So as it relates specifically to Nashville, Gaylord Opryland has a really solid book of business on the books going into this year. They're in a better position than they were last year. So we see really kind of more flattish because some of that group demand is taken up some of the -- is pushing out some of the leisure opportunities. But this market has sustained a lot of supply increase, but we've held our own and increase our RevPAR penetration, and we see that continuing as we move into '26.

Got it. And then just for my follow-up. I think it was you, Colin, that mentioned the 2027 guidance that you laid out back in January 2024. I mean it sounds like you feel very comfortable with the target there. We'll get an update later in the year. But just to clarify, when you talk about the level of comfort there, does that now include Desert Ridge, which obviously you've acquired expos?

Yes, there are some, what I would say, kind of ins and outs in terms of our assumptions. To your point, we did not assume Desert Ridge when we made those projections in '24, but we assumed that we had -- we would have our rooms addition open in the Rockies. And so if you kind of trade on property out for the other we are -- we remain well within that guidance range. And I would tell you that depending on whether you include Desert Ridge in or whether you leave it out, you're in the guidance range, it's just a question of whether you're -- where you're at in the guidance range.

We'll go next to now to Rich Hightower with Barclays.

To I guess, as we think about the ranges within the varying sort of guidance parameters. I guess, to hit the high end from where we sit today, let's say, of EBITDA or FFO? Is it going to be revenue driven to get there? Is it going to be expense driven? I know you said there's an embedded expense growth assumption of around 2.5%. But what -- just walk us through maybe the different flex points that would bring you to one end to the other?

Yes. On the top line, I think we've said it in various ways, but it's going to come down to where kind of group lands and all the components that Mark mentioned in his prepared remarks and some of the Q&A, we've referenced how do attrition and cancellations play out? How do meeting volumes respond to meeting plan or sentiment in response to what policy changes may come out of Washington and how that affects the macro. So it's largely on the group side, I think, where we can see driving a lot of where we land within the range of outcomes, particularly on that RevPAR range. From an expense standpoint, and the midpoint of our guide assumes that we're a little shy of 3% in terms of operating expense growth. So that feels pretty manageable at this point. I don't think that there are big drivers, I think, on the operating expense side that are going to move it. It's going to be demand-driven.

Okay. Very helpful. And then, I guess, maybe a slightly bigger picture question, but you did Desert Ridge last year. It sounds like that's folding into the portfolio successfully. And I guess as you think about the transaction market more broadly, there might be 1 or 2 assets on the market coming to market this year. It's not a lot, but there might be something in there that might fit within what you guys are trying to do. So talk about maybe your appetite for doing another deal in line with maybe the size of a Desert Ridge balance sheet capacity, how much could we do there? And what's the appetite, if any?

Yes. Look, I would tell you that we certainly have the balance sheet capacity to do a transaction. We are in the process right now of kicking off some renovation and some enhancements at Hill Country and digesting Desert Ridge. So we're very focused on those 2 properties. If an asset came to market that checks all of our strategic boxes in terms of the quality of the product, the market, the fact that it's group-oriented has the leisure and the leisure components and it's priced appropriately. It's certainly something we would look at and we have the capacity to do it. But the reality of it is that when we look across our current portfolio and the opportunities we have to reinvest incremental capital in very, very high rates of return, that's very, very -- that's a very attractive alternative to us. So for us to add a hotel, it needs to be a bull's eye for us. We're not -- we wouldn't look at marginal deals.

Yes. So Rich, just to give you a little bit more color these 2 hotels that we've acquired over the last 2 years are hotels that we had earmarked to purchase, I want to say, 10 years ago. We've been looking at these hotels every single year. And I don't think that there is another hotel that had -- that we have the same appetite for those two. So as Mark said, it would have to be something extraordinarily special. But the great news for us is we have tremendous opportunity to grow. We can grow the ones that we own. I mean, 6 of the 7 that we own, we would consider expanding. And then we have an entertainment business that's growing like a weed. And so the growth characteristics of our company are great. We don't have to go to the market and go buy some fancy hotel in a market that that really, over time, won't create the value that the existing portfolio will.

We go next now to Shaun Kelley with Bank of America.

Or whoever the right person is, I think there's a proposal out there for a potential sphere or a smaller version of it. or around the National Harbor complex. I'm just wondering if you could -- if you explored that or could talk a little bit about that and what the potential for that might be, especially given how transformative it's been for certain surrounding hotels in Las Vegas.

Well, I think that was -- there's been some chatter in the market about the developer of National Harbor, the [indiscernible] company. I think I read this partnering with the Sphere organization to do something like that. And if it did, it would be great for National Harbor. And so the answer is we would encourage them the Petersen company to do it. But the reality is the spheres are very expensive. You can't build 1 of these things, probably under $1 billion unless it's a real small sphere. And so the issue for us is that we like projects that generate 12%, 14%, 15% rates of return. We would be a sheer leader in Washington.

Yes. And at the right time, this is probably 2 to 3 years off. But at the right time, we would reach out and partner with that organization to create packages and opportunities for us for the hotel -- our hotel and the sphere to work together. In bringing folks in and giving them overnight visitation into our hotel.

Got it. Great. And then back in the prepared remarks, there was a mention around working with Marriott on efficiency. And obviously, I think that was in the context of the margin profile that you're looking for, for this year's guide. But could you just talk a little bit more broadly about initiatives there, what you've been able to accomplish and sort of anything that they're doing on the charge-out rates kind of following the credit card transactions that they're working on and just sort of how your structure with them is evolving.

Yes. I would tell you, our focus has primarily been -- we've spent about to months of 2025 working with them on procurement as well as third-party vendor contracts, really going back to some of our largest third-party contracts and breaking them down, looking at alternative vendor sourcing and really pushing folks to get the most aggressive and efficient contract in place. Same thing on the procurement side. There's been some changes with [indiscernible] and other outside vendors that Marriott uses on procurement. And we are really pleased with the results of that. On the credit card, we have been told that we stand to potentially benefit. That's not something that Marriott gives a lot of insight on to and that is within the management agreement that that's something they keep a little closer to the chest, but we understand it is a benefit for the system, and we wait to see what that will be.

We go next now to John DeCree of CBRE.

I think most have been answered, but I think I heard a comment about government business, I wanted to circle back to, if I heard correctly, was it 4% or 0.4% of your bookings for this year so far? And then the follow-up, are there any other sectors that your group business might be indexed to a lot of us are kind of focusing on the technology sector, et cetera. Is there anything that you would call out that you'd have more exposure to than another sector?

Yes. So the comment I made earlier was if you look at the same store, what we booked in the fourth quarter, government accounted for just about 0.4% of the production. And similarly, on the books, government room nights as of January 1 stood at about 0.4% of our total group room nights on the books. So very small exposure there as we have tried to pivot away from that given some of the challenges there that we've seen over the past year or so. Again, as a reminder, we have less than 5% of our business in any one sector. We're very well diversified as far as sources of our group business. We have been leaning into West Coast tech and fintech to try and grow that business that we see opportunity there. So limiting where we see some contraction on the government side and really pursuing and trying to grow our West Coast and fintech exposure.

We go next now to Jay Kornreich of Cantor Fitzgerald.

Just one for me. You mentioned seeing positive momentum from the meeting planners recently. And I was just curious as you look at the out years such as 2027 and 2028, which have more of the benefit from completed CapEx projects, can you comment just as to how room rate and overall bookings are trending at this point?

Yes. We've talked about '26 is in a great position, '27's in a good position. And as you look out beyond, we're very encouraged rate. What the sales team has been able to do by -- we've pivoted our value proposition with all these investments and the sales team has been able to deliver on the rate side. And obviously, rate is more sticky. It's going to stay with us once it's booked. So as we look out into the future years, we continue to see really solid growth as far as what we already have on the books and rate is the major driver of that.

'28 rates and beyond is up over [ 5%. ]

Yes. We're kind of holding that mid-single-digit rate growth for '28, '29, et cetera.

We'll go next now to Chris Darling of Green Street.

Colin, in the prepared remarks, I think you mentioned that the same-store hospitality portfolio RevPAR index share is effectively at the highest point it's ever been. Curious if you could share what that looks like? And then as you look out forward, and it probably some of the prior questions. But what's your level of confidence in being able to take further share over time? I always wonder if there's sort of a natural upper bound in your ability to push price relative to your concept.

Yes. Let me talk big picture and then Patrick will give you the detail. What we have tried to do over the the years that have gone by is to create a business, a hotel business, that is -- has relative sustainability to it compared to the organizations we compete with. And we do it through a number of pillars. One, the physical product of the of the hotels have got to be world class. And we have -- I think we've demonstrated over the last years our desire to continue to improve the quality of the assets, each asset in the portfolio. The second part of it is the service levels. And the way we sit on Marriott in terms of customer satisfaction, and the work we do directly going to the meeting planner, speaking directly to the meeting planner, our organization, not through Marriott speaking directly to the meeting around understanding the level of service execution, and we keep growing that. And then the third part of it is these convention goes, when they go to a market, they want to go to markets where they can have fun over 3, 4 days. And so the constant improvement to the what I would call the fund side of the stay is something that we have just continued to focus on. And this is why we are spending a lot of money on things like pool complexes sports bars, improving the quality of the restaurants, music in these hotels. And then it's just the knowledge of the meeting panel itself and understanding is exactly what they want. And it's a combination of these things that build this sort of sustainably this business that is continuing to get more and more market share. And this is one of the things that I feel very, very strongly about -- we go through these periods where the meeting plan or switches off, the meeting plan of switches on. We have an economic meltdown. We have 2 or 3 years of economic growth, but what we're interested in is managing through that noise. We have such a small share of this industry, and we are continuing to take out the customers that we don't want, bring in customers that we do want the higher-rated business and building just sustainable business here, and that is showing up in these RevPAR indexes. So Patrick, that's the process.

So to Colin's point, fourth quarter, we delivered an average RevPAR index on the same-store side of 143% versus the comp set. That's a 1,200 basis point improvement year-over-year. So really, really solid performance by the hotels in stealing share. Full year, our RevPAR for the same store against the comps that finished 127%. That's an increase of 610 bps year-over-year and even an increase of 410 bps versus 2023. So to Colin's point, we continue to invest to enhance the value proposition. We increased our distribution that allows us to capture more multiyear rotational business and a greater share of each individual meeting planners total book of meetings business, and that's how we'll continue to steal share.

And that's why there's no upper bound because the product. We continue to evolve the product, and we continue to change the value proposition. So we don't view it as a -- if there's an upper on this. We can continue to to drive more and more and more share and take share away from others who aren't investing.

We'll go next now to Stephen Grambling of Morgan Stanley.

This is maybe a big picture question, but how do you think about the impact of AI on the hospitality business, both as you think about demand drivers and the make up what meetings may look like, plus any opportunities you're seeing now on an operational -- from an operational standpoint for potential margin uplift?

Yes. Stephen, this is a question that we've spent a lot of time as a company asking ourselves and asking Marriott and frankly, discussing it with our Board. We had a long conversation about this last week at our Board level. And so Patrick, do you want to just give Stephen a broad outline of the engagement that we have made with Marriott and the areas that we see AI really helping in terms of efficiency?

Yes. I would say that our primary 3 areas of focus are going to be on the sales transaction and efficiency around that. Second, around revenue management with dynamic pricing and just understanding the competition and in enhancing our capabilities there. And then finally, which may get overlooked, but it's a massive opportunity labor is over 60% of our total cost. And so the ability to use -- to move away from Microsoft Excel spreadsheets to move away from some of the current systems they're pretty antiquated in the light of the AI revolution and move to AI-capable labor management tools, we're really focused on those 3 areas. And we are like all owners putting a lot of pressure on Marriott, Marriott is working to understand exactly what the cadence and pace of their investment and progress will be here. And so it's an ongoing discussion, but those are the 3 areas we're focused on.

The interesting thing about our business, both the hotel business and the entertainment business, the live entertainment businesses is that they are both businesses that are almost kind of an anti-AI play in that. We're going to reach a point where unless you're in the room with someone, you don't know whether it's real or whether it's AI generated. And so much like the pandemic became a tailwind for both of our businesses. I would argue that I think AI may ultimately be a tailwind as well because people are going to value -- they're one going to have more time; and two, they're going to value being face-to-face without a human being in the [indiscernible]

Yes. I agree with that, Mark, 100%. And -- so anyway, Stephen, hopefully, that helped you understand that it is a major focus for us as a company and we are going to continue to work with our friends at Marriott to make sure that we are an early adopter and the efficiency of the company just improves CEO over the next 1 to 2 years. .

I think that's everybody in the queue. So we would like to thank everyone for their participation this morning, and we'll do it onward. And if you have any further questions, you now have a good hold of our CEO at Ryman. Thank you very much indeed for your time.

Thank you very much, Mr. Reed. Ladies and gentlemen, that will conclude today's Ryman Hospitality Properties Fourth Quarter Earnings Conference Call. Again, thanks so much for joining us, everyone. We wish you all a great day. Goodbye.

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" Wells Fargo Securities, LLC, Research Division

" BMO Capital Markets Equity Research

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" Citigroup Inc., Research Division

" Truist Securities, Inc., Research Division

" JPMorgan Chase & Co, Research Division

" Evercore ISI Institutional Equities, Research Division

" Deutsche Bank AG, Research Division

" Jefferies LLC, Research Division

" Cantor Fitzgerald

" Green Street Advisors, LLC, Research Division

" CBRE Securities, LLC, Research Division

Welcome to Ryman Hospitality Properties' Third Quarter 2025 Earnings Conference Call.

Hosting the call today from Ryman Hospitality Properties are Mr. Colin Reed, Executive Chairman; Mr. Mark Fioravanti, President and Chief Executive Officer; Ms. Jennifer Hutcheson, Chief Financial Officer; Mr. Patrick Chaffin, Chief Operating Officer; and Mr. Patrick Moore, Chief Executive Officer, Opry Entertainment Group.

This call will be available for digital replay. The number is (800) 839-3516 with no conference ID required.

[Operator Instructions]

It is now my pleasure to turn the floor over to Ms. Jennifer Hutchison. Ma'am, you may begin.

Good morning. Thank you for joining us today. This call may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements about the company's expected financial performance.

Any statements we make today that are not statements of historical facts may be deemed to be forward-looking statements.

Words such as believes or expects are intended to identify these statements, which may be affected by many factors, including those listed in the company's SEC filings and in today's release.

The company's actual results may differ materially from the results we discuss or project today. We will not update any forward-looking statements, whether as a result of new information, future events, or any other reason.

We will also discuss non-GAAP financial measures today. We reconcile each non-GAAP measure to the most comparable GAAP measure in the exhibit to today's release.

I'll now turn the call over to Colin.

Thank you, Jen. Good morning, everyone, and thanks for joining us today. We're pleased to report third-quarter results in line with our expectations in what continues to be a somewhat volatile operating landscape.

On the hotel side of our business, our group business actualized a bit better than we had anticipated, with a stronger short-term pickup in corporate group meetings.

In addition, the leisure hotel market in Nashville improved as the quarter progressed. And in September, transient ADR growth for the upscale and luxury hotel segment turned positive for the first time since February of '25.

Overall, our same-store hospitality portfolio meaningfully outperformed the industry in the third quarter, achieving a RevPAR and total RevPAR index relative to our Marriott-defined competitive set of approximately 141% and 195% of fair share.

In our entertainment business, our recent investments in Category 10 and Block 21 continue to perform well, while some of our downtown Nashville venues saw some impact from the surge in new bar and restaurant openings on Lard Roadway.

Similar to what we're seeing in the hotel market right now, the rising popularity of country music and Nashville as a destination has attracted new live entertainment supply into the market.

Despite this near-term period of absorption, we continue to be extremely bullish on the long-term trajectory of Nashville. Progress on the new Derm Titan Stadium and the East Bank development continues.

Construction on Oracle's new headquarters there is expected to begin soon, following recent approvals by the Metro Council. Soil testing on the initial launch site of the boring Company's Music City loop has commenced.

And just last week, the Airport Authority outlined more details for the demolition of the current Concourse A and rebuilding of a new 16-gate terminal.

Today, with Concourse A out of commission, Nashville has 54 gates in operation and enough capacity to accommodate about 28 million travelers. When the new concourse opens in, I think it's early 2029, Nashville Airport will be able to accommodate up to 40 million travelers.

These long-term demand drivers are arguably some of the strongest amongst large cities in this country. And our iconic portfolio of brands is well-positioned to continue to induce and capture more of our fair share of incremental demand.

From a brand perspective, the third quarter was a major milestone for our entertainment business. The Opry traveled to the Royal Abbott Hall in London for its first-ever international performance, which was also broadcast on BBC2 in the U.K.

The show garnered over 1.2 billion media impressions, and the broadcast was BBC2's highest-rated program of the day. As an aside, the former Chair of the Royal Albert Hall Board told us that in all of his years, he's never seen an audience so engaged at a performance like he did at the Opry Show; folks were bouncing in the aisles at the Royal Albert Hall. That's never normally done.

The music that has made Nashville Music City is becoming so incredibly popular across Northern Europe. Now, to give you some idea of what's going on in this incredible feeder market, a couple of weeks ago, our business partner, friend, and country music superstar, Luke Combs, announced a series of stadium dates for next year across Europe.

And here's an illustration of why I say this genre is exploding in this region. He announced 2 nights at Wembley Stadium and an 85,000-seated stadium; both nights sold out. And now they've announced the third date.

The stadium in Glasgow, again sold out. And Slane Castle, look it up, an incredible festival site north of Dublin, catering to about 80,000, again sold out, and they've now arranged a second date.

And what Luke told me was that there's only ever been one band that has played 2 consecutive nights at Slane Castle, and that was U2. This is extraordinary stuff, creating Pilgrims who will make their way to Nashville and to our businesses.

As we had anticipated, through the investment we're making behind Opry 100, the brand is reaching far more fans than ever before. And we are continuing to expand the platform.

A couple of weeks ago, we, together with Luke, announced a second Category 10 development in the heart of the Las Vegas Strip. Construction is already underway.

And once open in the fourth quarter of '26, it will be 1 of only 2 country music live entertainment venues with Frontage on the Strip, the other being, of course, Old Red, which has performed incredibly well since opening early last year.

As we look ahead, our businesses are in great shape. The amount of group business we have on the books remains healthy, and we continue to generate good returns on the investment we're making in our hotel portfolio.

Our expanded entertainment platform contains more avenues for growth than ever before, and we look forward to building on the momentum of the Opry brand and Country Music more broadly in the years to come.

As always, we appreciate your interest and support. And with that, let me turn over to Mark to discuss the quarter, our positioning in more detail. Mark?

Thanks, Colin, and good morning, everyone. I'll review our third-quarter results and also provide some color on how we're thinking about 2026.

I'll start with our hospitality business. Our same-store hospitality segment delivered results towards the high end of our expectations due primarily to short-term corporate group pickup in the quarter for the quarter.

As a result, the year-over-year group mix shift was not as significant as we had anticipated, with corporate group room nights down only about 20,000 room nights from last year, about half the magnitude we saw in the second quarter.

With the decline in corporate group rooms, banquet and AV revenue declined approximately $14 million, but as has been the case all year, contribution per group room night, a proxy for catering spend per group guest, continues to exceed our expectations, so groups continue to spend at healthy levels.

Food and beverage outlet performance was a bright spot in the quarter, driven by a combination of higher leisure demand, better-than-anticipated corporate group volumes, and our recent capital investments.

Outlet sales per occupied room increased nearly 13% and performance was particularly strong at Gaylord National, Gaylord Rockies, and Gaylord Palms, where we've made significant investments in recent years, both in the quality of the offerings as well as our capacities.

In fact, total revenue for Gaylord National and Gaylord Rockies was a third-quarter record. And for Gaylord Rockies, the second-best total revenue quarter of all time, behind the second quarter of 2025.

Our leisure business was another bright spot in the quarter, including at Gaylord Opryland. Leisure room nights at Opryland increased more than 5% compared to last year, and leisure ADR, while still modestly lower year-over-year, actualized a few percentage points better than our expectations as of last quarter.

Finally, the JW Marriott Desert Ridge delivered third-quarter results right in line with our expectations. The existing meeting space renovations wrapped up at the end of September, bringing the multiyear comprehensive property refresh that was initiated by the prior owner to a conclusion.

As a value creation opportunity post acquisition, we have begun the work to convert 5,000 square feet of existing vacant office space into sellable carpeted breakout meeting space.

As we learn more about this property, we continue to be very bullish on its long-term potential under our ownership. Looking ahead to the fourth quarter and the next couple of years, we're pleased with the amount of business we have on the books.

Same-store group rooms revenue on the books for the fourth quarter is comparable to the same time last year, and early ticket sales for our holiday programming are pacing ahead of the same time last year.

Despite some of the macroeconomic uncertainty in government policy weighing on the broader lodging industry, the visibility we have into our group business for 2026 and beyond continues to be encouraging.

We're continuing to book more room nights at higher room rates. In the third quarter, same-store gross group room nights booked for all future years were up 9% compared to last year, bringing room nights on the books for all future years to a third-quarter all-time high.

The ADR on those bookings was also an all-time high, up nearly 3% year-over-year. Our group pace for 2026 and 2027 remains healthy. As of the end of September, same-store group rooms revenue on the books for '26 and '27 were up approximately 8% and 7%, respectively, compared to the same time last year for '25 and '26, with ADR growth continuing to pace in the mid-single digits, while the number of new leads and late-stage opportunities remain at near record levels.

Certainly, we've seen elevated cancellation activity this year due primarily to the government sector, but we've also responded with strong in-the-year-for-the-year bookings production and disciplined margin management while continuing to pursue long-term value creation through enhancements and additions to the portfolio.

Turning now to our Entertainment business. OEG delivered third-quarter revenue of approximately $92 million and adjusted EBITDAre of approximately $25 million.

Growth from Category 10 and Block 21 behind our recent investments was partially offset by softer volumes at our downtown Nashville venues as the local live entertainment industry absorbs the cumulative impact of recent new supply.

As a result, and as Jennifer will review in a minute, we've narrowed our range of expectations for full-year adjusted EBITDAre in our entertainment business with a new midpoint of $112 million, which represents approximately 6% growth year-over-year and approximately 12% annualized growth since 2019.

Before I turn it over to Jennifer, let me also provide some color on some of the building blocks for 2026, with the caveat that we're still working through the budgeting process with Marriott and expect to provide formal guidance when we report fourth quarter results in February.

From a macro perspective, we are optimistic we'll see an increase in group demand given expectations for lower interest rates and a more favorable business and regulatory environment.

However, even if the current uncertainty persists, we still expect our business model to outperform others in our sector and the broader group industry.

As I mentioned earlier, the group rooms revenue we have on the books for 2026 for the same-store hospitality segment is pacing approximately 8% ahead compared to the same time last year for 2025.

From a mix perspective, corporate group bookings are pacing ahead of association group bookings. Should this trend continue, we would expect it to be a modest tailwind for group outside-the-room spending levels in 2026.

On the cost side, recall that the collective bargaining agreement for the Gaylord National became effective in November of 2024, so we will lap the initial wage and benefit increases in the fourth quarter of this year.

Regarding capital, we anticipate that the sports bar development at Gaylord Opryland will open in April of 2026, and the Texas rooms renovation will finish sometime in the second quarter.

We also expect the meeting space conversion at the JW Marriott Desert Ridge to come online in the second quarter. The ongoing meeting space expansion at Opryland will continue through 2027, and we expect to kick off a room renovation at the JW Marriott Hill Country beginning in April 2026.

And finally, on entertainment, we expect our 2025 investments behind Opry 100 and the new amphitheater addition to our portfolio to be a modest tailwind to growth in 2026.

As Colin mentioned, Category 10 Las Vegas will be under development for much of the year, opening sometime in the fourth quarter of 2026 with full-year contribution in 2027.

As with all our ROI projects, we expect to generate at least mid-teens unlevered IRRs on the estimated project cost of approximately $35 million. We look forward to providing more details on how we expect the year to shape up on our fourth quarter call in February.

And now I'll turn it over to Jennifer to run you through our guidance revisions and review our financial position.

Thanks, Mark. Regarding our outlook for the full year 2025, we are narrowing our guidance ranges now that much of the year is behind us.

And in our Entertainment segment, we are lowering the top end of our guidance range for adjusted EBITDAre to reflect softer volumes in our downtown Nashville venues related to new supply in the market.

On a consolidated basis, we now expect adjusted EBITDAre in the range of $772 million to $802 million, AFFO in the range of $509.5 million to $538 million, and AFFO per fully diluted share in the range of $8 to $8.38.

Turning to our balance sheet. We ended the third quarter with $483 million of unrestricted cash on hand and our revolving credit facilities undrawn.

Total available liquidity was nearly $1.3 billion. We retained an additional $33 million of restricted cash available for FF&E and other maintenance projects.

At the end of the quarter, our pro forma net leverage ratio based on total consolidated net debt to adjusted EBITDAre, assuming a full year contribution of adjusted EBITDAre from the JW Marriott Desert Ridge, was 4.4x.

Finally, let me comment on our anticipated major cash outflows for the year. Regarding our outlook for capital expenditures in 2025, we are narrowing the range of our expectations to $375 million to $425 million based on our latest construction timelines for projects currently underway.

As we mentioned in our earnings release, these estimates include modest investments at the JW Marriott Desert Ridge, accelerated material purchasing for the planned 2026 rooms renovation at the JW Marriott Hill Country, and initial project costs for the development of Category 10 Las Vegas.

Regarding our dividend, it remains our intention to continue to pay a minimum of 100% of our REIT taxable income through dividends. And with that, Mickey, let's open it up for questions.

[Operator Instructions]

We'll take our first question from Cooper Clark with Wells Fargo.

Curious if you could provide us with updated thoughts on the entertainment market in Nashville, acknowledge that drove the guidance reduction in the quarter.

Just curious how you're thinking about that business over the next couple of years, as it seems like supply headwinds are persistent.

Should I start, Patrick? Yes. This is Colin Reed. So the issues that we saw within this city over the period of time, February of this year through June, were that the more budget-conscious consumer pulled back a little.

And we saw it in other markets, too, like Las Vegas. But it happened here. And I think a lot of it was created by the overhang on what the hell was going to happen with the big beautiful bill and tariffs, and the media was saying the world was going to fall apart.

But what has actually happened as the year has progressed is that obviously, things have stabilized very, very well. The market, the New York Stock Exchange, and the S&P at all-time highs right now.

Trade agreements are being confected, and interest rates are moderating. Corporate profits seem to be in good shape, and airline traffic is up. And I'll give you a statistic that was relayed to me last night by the CEO of the Nashville Airport.

October traffic into Nashville was up 10% over last year. And the amount of traffic that the airport received in October was the best October Nashville has ever had.

We've been, I think, a little cautious in what is going to play out in the months of November and December, and that is reflected in our guidance. But as we look forward to 2026, 2027, we have this new stadium opening that is going to dramatically increase big, big concerts.

We have a whole bunch of new developments taking place on the East Bank. We have a greater capacity to put more traffic through this airport. We have folks, I can tell you, every one of the 3 large airlines that are flying in from Europe has increased the capacity of their airlines over the course of the last couple of months.

So as we look forward to '26, '27, '28, I think we're going to see a surge in tourism in this city, and I think it's going to be long-term, really good for these iconic assets that we own.

And then I guess, how should we be thinking about a potential spin of OEG? Are there more bolt-on acquisitions within the entertainment business or additions you need to make to the leadership team that you want to get done first?

Well, the opportunity we have with this business with the acquisition of Southern, what we've done in Austin, the expanding into markets like Las Vegas, I would be very surprised if you don't hear from us over the course of the next few months in other markets that we will potentially move into markets that are very country music-centric so we can intercept those consumers in their source markets.

The great thing about this business is I think we have more opportunity to grow it today than we've ever had. And I would suggest that over the course of the next 12 to 24 months, you'll hear from us more on the growth of this business.

We will move next with Aryeh Klein from BMO Capital Markets.

Maybe first on cancellations, which ticked up in the quarter. Can you provide a little bit more color on recent trends? What have you seen here in October?

And is this still mostly government-related or any other sectors where you've seen an uptick?

Aryeh, this is Patrick Chaffin, and good to hear from you. Yes. So cancellations were up in the quarter.

We were expecting that as a result of the tariff situation that began in the second quarter of this year. I would tell you that as we look across the year, if you look at the Smith Travel Research information, U.S. group monthly occupancy started to decline in April of this year with the tariff situation emerging.

And while our group business has fared really well through that tariff situation that's characterized Q2 and Q3, the overall U.S. group monthly occupancy has continued to decline and appeared to trough roughly in August based on Smith Travel information. And it has been recovering in September and potentially in October based on what we've seen so far.

So it's too early to tell how cancellations are going to fare in the fourth quarter, but it appears that while it's still down, it's starting to move in the right direction.

For us we have seen elevated cancellation activity. We have also seen group leads and group demand in the corporate sector increase at the same time. So we've been able to mitigate some of that impact. But cancellations have been elevated.

They've been mostly in the government and government-related sectors, but we have seen some impact from corporate layoffs that have been occurring across the country.

But again, I would stress corporate leads and corporate booking volumes continue to be very, very strong. So we've been able to mitigate some of that.

So we'll see how the fourth quarter goes. But we do feel like, while overall U.S. monthly occupancy and demand are still down, it is moving in the right direction.

And then curious if you can touch on some of the underlying leisure assumptions for the fourth quarter.

Last year was a bit of a challenge, and I think you made some changes to the ICE programming. Any early feedback on either bookings or expectations? And then I believe you're also bringing ICE to Hill Country. How is that shaping up?

Good questions. Pat, do you want to deal with that?

Yes. So Hill Country will have ICE for the second year in a row. We'll bring ICE to Desert Ridge next year.

But we are expecting improved performance in ICE and in leisure in the fourth quarter of this year versus last year, about a 5% improvement. I would tell you that we're cautiously optimistic. It's still early, but we have some really positive trends occurring right now.

Our ICE tickets are up. We've booked about 300,000 tickets to date. It's only about 21% of what we expect to actualize for the full holiday period. But the 21% we have on the books is about a 6-point improvement over what we had booked at this point the same time last year.

So we're up about 95,000 tickets over the same time last year. So we're moving in the right direction to achieve that improved performance year-over-year, and we're in a good spot.

From a transient room night perspective that's associated with the leisure holiday bookings, we booked about 127,000 room nights to date. That represents about 60% of what we expect to actualize for the 2025 holiday period, and that's an improvement over what we had booked same time last year as well. So we're up about 11,000 leisure room nights.

So we've forecasted an improvement both in tickets and in leisure room nights, and we appear to be on pace to make that happen. I would remind you that we still have about 79% of our ICE tickets to book, and about 60% of those book within a 10-day travel period.

So still a lot of wood to chop, but we are moving in a very encouraging direction, and we're cautiously optimistic.

Our next question comes from Smedes Rose with Citi.

I wanted to just ask a little bit about, I guess, the relationship between gross definite room nights that you show quarterly and the net definite room nights. Obviously, the gross improved nicely year-over-year.

The net declined for the second quarter sequentially. I'm just wondering, do those 2 go together? Should be looking at the flow-through of one to the other? Or maybe you can just speak to what those numbers are telling you?

Hi, Smedes, it's good to hear from you. Let's talk about gross versus net on the group side. So the main difference between those 2 is -- let's talk about gross first.

As I mentioned earlier, we're seeing really great production from the sales team. We believe we have the best sales team on the planet on the group side, and they continue to perform.

Corporate leads are up, and corporate bookings continue to be up. And so they're doing a great job of really taking advantage of the opportunity, even though we are losing some of the cancellations and revals.

So on the gross side, we see really good production on the corporate side. To your question on net, the difference between gross and net is essentially cancellations and revals.

And when I say revals, that's groups who have previously contracted for, let's say, 1,000 room nights in their block who then call in and say, "Hey, due to tariffs, we're pulling back down to 800 or 700 rooms from our originally agreed upon block.

So you have your gross number, which is booked by the sales team. And then if a cancellation or reevaluation of that room block occurs, that's the difference in the net. And so that all the nets together produce the net production in the month or in the quarter.

So if you think about what's going on, as I mentioned, corporate room nights continue to be strong, and the folks who are booking right now have already taken into account the impact of tariffs and everything else that's going on within their business.

And so they're contracting at a more realistic level based on what they know is going on in the economy. The room nights are on the books previously that are calling in and reducing their blocks are just taking into account now what's going on in the economy.

So we continue to see really strong gross results, offset somewhat by what's happening on the netting side with reevaluation of the blocks from groups already on the books and the cancellation that has been occurring.

And then you mentioned in your opening remarks that corporate bookings are outpacing association bookings.

Do you attribute that largely to the context of tariffs that you were just speaking to? Or is there something that you might think might, I guess, fuel association bookings going forward over the next few quarters?

Yes. I mean, there's definitely some impact from the tariffs without a doubt. The other thing I would point to, though, is where we stand at this point in the year.

We currently have 7.9 million group room nights on the books from a same-store perspective for all future periods. At this point in the year, that's the highest level we have ever seen, and it has a really strong rate associated with it as well.

So there's the impact of tariffs, but there's also the impact of the fact that we just have less availability on the books for selling into the future than we've ever seen in our history, which is a good problem to have and will help us further compress group ADR going forward.

Smedes, my hope would be that, that this shift towards the corporate mix will become more systemic over time because as we've talked about in the past.

One of the things that we're trying to accomplish with the capital investments we're making across these hotels is to improve the quality of the rate and improve the quality of the group, and lean more into that corporate customer versus some of the lower-rated SMERF and association business.

We will move next with Patrick Scholes from Truist Securities.

Question for you specifically on the D.C. National. Are you seeing any impact from the government shutdown as it relates to 4Q expectations or just forward bookings in general?

Yes. Patrick, this is Patrick. Yes, we have seen a few groups that have pulled back or canceled as a result of the shutdown.

But it has been pretty isolated, honestly. And it's not really been material in terms of the number of groups that have called in and said, "Hey, we're having to pull back or cancel.

So there has been some impact, but it has not been very material. It's pretty isolated thus far.

But it's fair to say National's performance was terrific.

Yes. National is right on plan for the year, doing a great job. And as we look to 2026, we look for additional ways to offset the impact of the collective bargaining agreement, but the property is in a really good position.

And some of that you're seeing from the capital we deployed coming out of COVID, around food and beverage, and the room renovation that we did. Those investments are paying off.

Yes. And we're booking a bunch of business. So it's pretty good.

Our next question comes from Dan Politzer with JPMorgan.

Group, it's pacing up nicely for 2026, up 8% and 2027 up 7%, I believe you said. Can you maybe talk about how the conversations with group and meeting planners ex ex-government, obviously, have evolved?

Like, have they meaningfully improved versus 3 or 6 months ago, that gives you maybe increased confidence as you look out to that '27 guidance that you still have out there?

Do you want to take it?

Sure. Yes. I mean, you saw what happened in our third quarter results. There was a bit of an overreaction in the second quarter to the tariff situation, and folks significantly reduced their expectations for the third quarter.

As we actually moved through the third quarter, things improved somewhat, and we actually ended up beating our expectations on the banquet contribution per group room night.

The fourth quarter is more dominated by the transient side. And I don't want to give any guidance on 2026 right now, but we feel like we're well-positioned for 2026, and we're hopeful, as I was alluding to earlier, that while, again, U.S. group demand is currently still down, it is moving in the right direction.

So we see meeting planners pausing somewhat in some of their decision-making around when to book, but we're not seeing them wholesale pull back and make any changes.

It's really just, hey, the environment is volatile. We're watching it, and we may delay our decision-making a little bit, but we feel like we're in a great position for 2026 as we look towards that and start planning for it.

Hi, Dan, this is Colin. I want to make one observation. And we've been in this business here, certainly, Mark and I, Patrick, almost 25 years running this business here.

And we've seen these periods where we have volatility in the mindset of the group consumer. But Mark said it 5 minutes ago, the group is not vanilla. Different companies that are focused on group operate in very different ways. And what we have done is, I think, we put together a pretty good management team in these hotels.

We have world-class physical assets. We generate really good levels of service. And as a consequence, we have a high degree of loyalty amongst these meeting planners. And that is one of the reasons why you see us booking the living daylights out of this business and why going into 2026 with the numbers that we have on the books.

And it's something that's taken a long time to perfect. And we will go through these periods. Tariffs will create a problem in the mindset of many companies. But at the end of the day, these companies have to meet and the associations have to meet, and they choose to meet in the places that deliver the best levels of value for them, and we believe that is our company.

Yes. And I think an important aspect to keep in mind as it relates to '26, that 8% revenue increase year-over-year, was about 2/3 of that premium was from rate.

The durability of that rate premium versus an occupancy premium at this point of the year is much stronger. And that's really driven by the fact that we have been investing capital and we have been focusing, as Colin was talking about, on these higher-quality corporate customers.

So you're seeing that strategy play through into the numbers.

And then just pivoting to entertainment. It sounds like there are a couple more investments coming in, obviously, Category 10 in Las Vegas. What's your appetite at this point, or thoughts around monetizing that?

Is there a certain EBITDA number you guys have marked internally that you want to get to? Or is it just that you're seeing how it evolves over time?

Well, Dan, you're a sophisticated analyst. The EBITDA is one measurement. The growth characteristics are another measurement.

Companies that are able to articulate that they have a growth rate of whatever it may be, whether it's 5%, 10%, 15%, or 20%. As you go up the scale, invariably, the investment community is far more receptive to companies with higher growth rates than lower growth rates.

And so it's a combination of things. And as we are plowing the field and sowing the seeds, we've got a lot of stuff that will come out of the ground here over the next 12 to 24 months.

But here's what I do believe. And I know Patrick Moore, you believe this, too, that this is an extraordinarily valuable asset that we have. And we want to pick a moment in time. And at that moment in time, we will create a lot of value for our shareholders.

This is a very valuable business.

Our next question comes from Duane Pfennigwerth with Evercore ISI.

Within your corporate group bookings, are there any specific industries you would call out from a recovery perspective?

That's one of the beauties of our business. We don't have one segment that operates over 5%. So how would you answer the question, Patrick?

No, I would completely agree with what you just said, Colin, which is that corporate is strong for the most part across the board. And I would call out any one sector as being stronger.

I mean, we've obviously been shifting our guns towards fintech quite a bit. So that's an area that we've been expanding in, but I wouldn't say there's greater growth in any one segment right now.

It's fair to say that the impact that we've seen this year, obviously, from the government shutdown as well as all the devil's work It's we're really seeing weaknesses in the government-related large consulting groups, segments that rely on government contracts.

And then just with respect to Desert Ridge and some of the groups booking into that, broad brush, how many are existing rotational groups versus new to your portfolio?

So I would tell you that we've only begun to scratch the surface on that. We actually just hired 2 new sales resources who focus on lead generation, who are going to be solely focused on increasing the overlap between Gaylord and JW, as well as increasing the rotational opportunity between the JWs that we own.

So it's really too early because they honestly have just been hired in the past 45 days, but we're really encouraged because we believe that we've seen immediate impact in the collaboration and communication between the teams.

And I think I'll be able to talk to you in February about some really interesting and encouraging results as a result of those hires.

We will move next with Chris Woronka from Deutsche Bank.

I want to ask, as you look out, this is more of a multiyear, longer-term question, if that's okay. When you look at the composition of groups, and I'm really talking about by size, but also maybe a little bit corporate versus association.

Is there any desire to maybe reduce your mix of the smaller short-term groups that can be more unpredictable? And are you seeing greater, I guess, growth in demand from the larger groups on the corporate side or from the smaller groups that like to book closer in? And then I have a follow-up.

Let me start. The last time we did a big, big, big piece of research, and the last time we observed the research that Smith Travel did, large groups are the groups that are growing in this country.

And we are uniquely positioned because of the scale of our assets and our ability to accommodate these large groups. And it's one of the things that I know I look at every month, Patrick, when we get our sales report, is the way the room nights how they fall between 10 to 300 and larger.

So we're seeing good growth in the large groups, but how would you answer that question?

Yes. Chris, I was actually looking at that last night, and it was interesting to see that for 2026, we have a higher mix of the larger groups on the books versus the same time last year, as we looked into 2025.

So, as Colin has been talking about for a few years now, we continue to see that growth in the larger groups. But I do want to say the small groups are always essential to what we do.

They have a higher rate, they book short term, and they allow you to really top off your group business with the remaining patterns that may be open.

And so they come along at the last minute and help you fill out that piece of business, and then you put on top of that any leisure opportunities that you might have.

So we're increasing the mix towards the larger group, but the small group will always be essential to finishing off the business.

The follow-up is maybe for Colin or Mark. I mean, you guys have a lot of perspective. You've been in Nashville for a long time.

Colin, I think many years ago, I'm not going to hold you to this, but I think many years ago, there was a thought to maybe doing something around your Opryland with some of the parcels that might be available or you already.

My question today is, really, how do you see that little submarket near Opryland evolving? There's kind of a lot of retail stuff across the street. I know you guys at one time were partners in the development across, I think, Briillley.

Is that submarket of Nashville something where you think that could become a new little market aside from downtown, and you can kind of create your own buzz there aside from obviously what Opryland already has?

Yes. So here is my belief. And I spent a lot of my time talking with the elected political leaders of this city and the state on this issue.

My perspective is, and some of it has been shaped by Mark's and my history in the early '90s, shaping casino gaming throughout the country and particularly in Las Vegas.

My view is that the demand for the product that originates in this city is blowing up right across the planet. And the opportunity for this city is extraordinary.

And the question becomes how do we do it, and the form in which we do it. So we own a lot of land out here on the eastern side of the city. And I think we've proven to the world that we don't have a geographic problem here because we've created with Opryland, the most successful convention resort in America that doesn't have a casino.

There's not another convention resort that comes close to what we have built over here. And then you look at the Grand old Opry that puts 0.75 million people through it every single year.

And my view is that we have a big-time opportunity to change the campus and make it more compelling over time for the consumer that I believe will turn up in this city in droves over the course of the next decade.

And I think the other thing that using the parallel to Las Vegas, you think about Vegas and gambling. And 10 years ago, the notion of putting professional sports in that city was crazy.

Nobody would have thought it was possible. Now you have professional sports in that city, and that city has become arguably the sports capital of America.

We're going to be building here a state-of-the-art city, a state-of-the-art stadium here. And we're going to be attracting Super Bowls, final bowls, college playoffs, WrestleMania, as Las Vegas has that didn't exist.

The notion of putting a Super Bowl in Las Vegas a decade ago was crazy. But we have a product here that people want, and it is absolutely blowing up right across the globe. And I do believe that the potential for Nashville is extraordinary.

We will move next with David Katz with Jefferies.

This may or may not be top of mind today. But just curious what your appetite is and what the boundaries would be for potentially more acquisition.

One of my go-to issues is always, as you know, I've followed the property in Chula Vista for many years. And that's underlying a more general question.

Shall I start? Yes, go ahead. So, David, the way we've known each other for a long, long time. And I think you would appreciate that the way we think about acquisitions is purely how do we create value for our shareholders?

How do we generate really high-quality return on invested capital? So as we sit here today, we have 7 of these beautiful babies, these great hotels in great markets, 2JWs, 5 Gaylords.

And here's the thing. We have, I don't know, right now, $1 billion, $1.5 billion in capital in some way, shape, or form under construction that will happen over the next 1, 2, 3 years, and we believe that the majority of that capital is going to generate mid-teen type returns.

And all of that is going to create value for our company. So the issue for us is, is there a market that we can plug an asset into? Is there a market that Patrick Chaffin was talking about a second ago about plugging in Desert Ridge into our system and moving customers around?

Is there a market that we're not in that we'd like to be in? And the answer is there may be 1 or 2 markets left in the country. But the issue is the asset that we would acquire, the price at which we would acquire it for and how we create real value for our shareholders by doing that.

My personal view is I think that if I were a betting man, I would say over the next 1 to 2 years, I think the deployment of capital will be focused internally versus externally, but who knows?

The internal rates of return on these incremental investments are pretty hard to compete with if you've got to buy existing assets at market rates.

Yes. But we did the bridge a few months ago, and we've been at that one for, I don't know, 10 years, looking at it and trying to get it. And it's simply because of the belief that we can rotate customers into that top 10 group market, Phoenix, Scottsdale, and that over time, we can expand that property and generate really high returns on that incremental capital.

So we'll see. But if I were a betting man, I bet you we'd be more likely focused on deploying capital internally than externally.

We will move next with Jay Kornnerbreg with Cantor Fitzgerald.

Last quarter, I believe you guys had commented on the expectation for RevPAR in the third quarter to be down mid-single digits and reverse for the fourth quarter.

And so I guess just curious now that the third quarter came in ahead of those expectations and yet the annual guidance was maintained, I guess where are you maybe seeing some 4Q softness?

Is it really just related to government or anything else that's worth calling out?

We've mentioned several times throughout the call already, Jay, that we are seeing government, government-related weakness. That's not a surprise as it relates to the shutdown that's still ongoing.

But certainly some bright spots in terms of how leisure is pacing. So all of that's coming together to where I think we are cautiously optimistic about how the fourth quarter will pan out.

We're in as good a position, I think, as we can be with all the headlines that are ongoing. Certainly pleased with how the third quarter turned out relative to our expectations, and feel very comfortable being able to reiterate that full year guidance on the hotel segment.

I think the other part of it is the thing that we don't know that we're being cautious about is how long this dam shutdown lasts. And as the shutdown prolongs, do we see an acceleration in negative behavior by the consumer?

And we don't know the answer to that question. Nobody does. And if these politicians can get their act together and get this country back to work, I think our fourth quarter should be pretty decent. But the big unknown is the craziness of what is taking place in Washington right now.

Yes. But Mark mentioned we've got a comparable number of room nights on the books from a group standpoint in the fourth quarter.

Patrick mentioned that at improving rates. And ticket sales, while a small proportion of the total complement that we would expect for the full holiday season has transpired this early on, given the short booking window for leisure, it's pacing ahead.

I'm encouraged by what we saw in October here in Nashville in the amount of airline arrivals, which is material. So we'll see.

And I would point out, this time last year, it was very clear that folks were very distracted by a national election. That is not the case this year.

We believe that's going to bode well for leisure. But to Colin's point, it's just a question of how much this government shutdown is a distraction to the groups of the country.

And then maybe just one follow-up, moving just to the renovation side with a number of renovations being completed and others ongoing.

As we look towards 2026, do you expect the EBITDA lift from completed projects this year in 2025 to outpace the EBITDA displacement from renovations that will be ongoing next year in '26?

Yes. Jay, I appreciate the question. We're going to give guidance in '26 as we finish out our budget.

We'll be meeting with Marriott here in the next week or 2 to review what that's going to ultimately look like. We can certainly give you the building blocks, which are very consistent with what we've talked about all year.

Certainly, we've already shown that the capital that has come online from the projects we did last year, if you look at the Rockies, has started to return.

Performance has been great there, related to the Grand Lodge work that we did there last year. So you're seeing that. So certainly, as things come online like the Opryland Sports Bar, which will be completed early in the year in 2026, you will start to see returns from that.

But as Colin mentioned, we've got a lot of things in the pipeline, a lot of good things that are going to return well, and those are going to be ongoing. So we'll just see how that can shape up in terms of improvements from what's coming online and then continued investments as we continue down the multiyear path.

It would be fair to say that we don't expect any incremental headwinds from a disruption perspective next year?

No. And I would give a shout-out to our design and construction teams, who are really getting all of this renovation and construction work down to a science and doing a phenomenal job with minimizing the impact on the business and trying to pull back on the displacement that we've already projected.

We have 3 minutes from the top of the hour. Maybe take one more question. Got a couple. We'll shorten our answers. Let's try to get through all these. Go ahead. All right.

We will move next with Chris Darling with Green Street.

Colin, you mentioned that in all likelihood, OEG will expand into other markets in the coming years, or at least you have the opportunity to do so. How do you think about the international opportunity for OEG? Any thoughts on growing overseas? Or were you primarily referencing new U.S. markets?

It's funny you asked that question. Patrick Moore, Mark, and I, 2, 3 weeks ago, had dinner with Luke over in London, Luke Holmes, who was with us on the Opry show that we did at Royal Alber Hall.

And Luke would love to do a category over there simply because of the popularity that, that man has. It's extraordinary. I think it's something that we'll be looking at, but it's not something that I would say, no, we're not going to do that. The popularity here is music.

And I think the product that we deliver would be well sought after. The issue is finding a partner to do that in that neck of the woods. Doing business in the U.K. is difficult. And so we'll see.

But the good news is, I think we've got lots of other opportunities to grow this business domestically.

And we do have content airing in the U.K. now for the Opry show. Yes. So the brands are present. We just don't have a physical presence in those markets at this point.

We will move next with John DeCree with CBRE.

Maybe just one on that same theme about international next year, the World Cup in North America. I know there's only a handful of games in Dallas, but how do you think about given Country Music's penetration in Europe, follow-on trends?

Is there any programming that you're thinking about doing? Have you seen any early bookings yet? I know it might be early, but I think it dovetails with our conversation on country music expansion in Europe, given there might be some customer overlap. Curious if you have any initial thoughts.

Well, we're going to see a lot of international travel in the summertime next year for the World Cup. And unfortunately, our stadium here will not be complete. And I can tell you, I've spent quite a bit of my time with other folks in the city, quoting FIFA to try and get the 2026 World Cup here in Nashville.

But there are going to be markets where there will be some lift, like, for instance, Orlando is a market, I think that we'll see lift because of the World Cup next year.

But the interesting thing is, we're very active, not we, Ryman, but we, the city, are very active in quoting FIFA for the Women's World Cup here because we will have a beautiful stadium.

And so this is a consumer base that we think could be potentially very valuable for international sporting events. We just announced, I think it was last week, that we secured the Olympics for the physically disabled folks.

What are we, Special Olympics? Yes, Nashville has secured that here. So this is a consumer base that we are very interested in.

All right. I think, Nikki, that's it. I appreciate everyone being on the call this morning. A lot of good questions. Our business is in good shape, and we're looking forward to this fourth quarter. And I know I'm looking forward to seeing how '26 plays out because I think it could be a good year for our company.

Thank you, everyone.

Thank you. And this concludes the Ryman Hospitality Properties Third Quarter 2025 Earnings Conference Call. Thank you for your participation, and you may now disconnect.